SEC Proposes Rules on Broker-Dealer and Investment Adviser Use of Predictive Data Analytics and on Internet Investment Adviser Registration

On July 26, 2023, the U.S. Securities and Exchange Commission (“SEC”) released two sets of rule proposals. First, the SEC proposed new and amended rules under the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940 to address conflicts of interest associated with the use of predictive data analytics and similar technologies by broker-dealers and investment advisers in investor interactions. Second, the SEC proposed to amend the existing registration exemption for “internet advisers.” Comments are due within 60 days after publication in the Federal Register.

We provide an overview of the rule proposals in this Legal Update.