SEC Hosts Roundtable on Artificial Intelligence

On March 27, the SEC hosted an AI Roundtable that discussed the risks, benefits, and governance of AI in the financial industry.  Acting Chair Uyeda emphasized the importance of fostering a “commonsense and reasoned approach to AI and its use in financial markets and services.”  The roundtable reflected a shift from the unpopular predictive data analytics rule proposal of the prior administration and the Commissioners indicated that the SEC intends to take a reasoned approach to its review of existing regulations, including a gap analysis and a review of whether industry guidance might be appropriate. 

The SEC’s AI Roundtable was innovation oriented and technology-neutral throughout.  The panelists focused on the potential risks of generative AI and discussed mitigating controls including human oversight, data management, sensitivity analysis and bias testing. Panelists included members of academia focused on AI, FINRA and U.S. Treasury representatives, and the heads to strategic initiatives and governance in the AI space at several large financial institutions.  A common theme from the panelists was the recommendation to closely document a firm’s use of AI, develop and implement mitigating controls and conduct ongoing training.  Fund directors may seek to ask fund management and service providers about their initiatives in these areas.

Click here to read additional information about the SEC’s AI Roundtable.
Click here to read Acting SEC Chair Mark Uyeda’s remarks at the SEC AI Roundtable.
Click here to read Commissioner Crenshaw’s remarks at the SEC AI Roundtable.
Click here to read Commissioner Peirce’s remarks at the SEC AI Roundtable.