SEC Issues Proposed Rule Related to Conflicts of Interest Associated With the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers

The SEC has issued a proposed rule, Conflicts of Interest Associated With the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers. The proposal is intended to “eliminate, or neutralize the effect of, certain conflicts of interest associated with broker-dealers’ or investment advisers’ interactions with investors through these firms’ use of technologies that optimize for, predict, guide, forecast, or direct investment-related behaviors or outcomes.” In addition, the proposal would amend certain rules “that would require firms to make and maintain certain records.”

Comments on the proposed rule are due 60 days after the date of its publication in the Federal Register.

For more information, see the press release and fact sheet — as well as statements by SEC Chair Gary Gensler and Commissioners Caroline Crenshaw, Jaime Lizárraga, Hester Peirce, and Mark Uyeda — on the SEC’s Web site.