ACA Highlights 8 Steps CCOs Should Take to Prepare for AI Regulation

ACA released a paper detailing steps Chief Compliance Officers should take to prepare for potential AI regulatory efforts. These steps include taking an inventory of the firm’s current AI use, assessing the risk, implementing controls around the use of AI, and a review AI-related disclosures. The article states that “the rapid adoption of AI by the firms also means compliance executives must monitor new data privacy and intellectual property risks, compliance risks associated with the potential for biases and conflicts of interest in the models of the tool, and hallucination risks that can arise when these tools produce inaccurate results.” The authors note that regulators including the SEC and FINRA, as well as Congress have put forth multiple actions and legislative proposals to place guardrails around the use of AI. The article stresses the importance of communication with employees, training, developing a use policy around the use of AI-based tools, and perhaps the establishment of an AI Governance Committee.

Click here to read ACA’s paper “8 Steps CCOs Should Take Now to Prepare for AI Regulation.”