July 28, 2023
On July 26th, 2023, the SEC proposed new rules that would require broker-dealers and investment advisers to take steps to mitigate conflicts of interest between the firm and its clients that result from the firm’s usage of predictive data analytics and similar technologies (“covered technologies”).
The SEC states a “covered technology” includes a broker-dealer or investment advisers’ “use of analytical, technological, or computational functions algorithms, models, correlation matrices, or similar methods or processes that optimize, predict, guide, forecast, or direct investment-related behaviors or outcomes of an investor.”
Broker-dealers and investment advisers should consider what changes would be necessary to comply with the proposed new rules as they would apply when a broker-dealer or investment adviser uses predictive data analytics or similar technologies during an interaction with an investor.
Fairview Cyber offers turnkey solutions that address SEC requirements for cybersecurity, and our team of regulatory experts are available to answer any questions you may have regarding the proposed rules. To learn more, visit our Cyber Solutions page or contact us if you’d like to speak to one of our regulatory experts.