(NEW YORK)–The Securities and Exchange Commission (SEC) is considering new rules around the use of artificial intelligence in financial services, according to SEC Chair Gary Gensler.
Speaking at an industry conference on July 18, 2023, Gensler said AI and machine learning technologies have the potential to be “transformative, disruptive and Trojan horse-like” in capital markets.
While acknowledging the possible benefits of AI, Gensler raised concerns about potential risks and lack of transparency. He said new SEC rules may be needed to address issues like fairness, discrimination, safety, and compliance. He said the SEC is thinking through how to update rules around governance, record-keeping and disclosure as AI becomes more widespread.
Consumer protection is another consideration. Gensler raised concerns about the “black box” nature of some AI systems and the lack of explainability. New rules may promote transparency for end users.
The SEC chief’s remarks signal that significant new rulemaking around AI may be on the horizon. With these powerful technologies spreading quickly, regulators are scrambling to keep pace. The SEC appears keen to take a leading role in establishing guardrails and standards around the use of AI in finance.
Tom Bustamante, the Founder & CEO of AI Venturetech commented, “The rise of AI and machine learning is creating new regulatory challenges, even for small public companies. The risks around discrimination, safety, and transparency should be a warning that companies need to be proactive in baking compliance into their AI strategies from the start. Having sound governance, rigorous testing protocols, and clear explainability measures will help small firms reap AI’s advantages while avoiding future regulatory pitfalls. With the SEC planning closer oversight of AI, small publicly traded companies need to get ahead of any potential rule changes by building compliance into their AI systems from day one, rather than reacting later. AI Venturetech assists clients in staying ahead of any potential rule changes to maintain their competitive edge through trust, compliance, and governance in their AI offerings.”
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About AI Venturetech
AI Venturetech, Inc. is a New York-based consulting firm specializing in the cutting-edge technology fields of artificial intelligence, quantum computing, and cybersecurity. We are dedicated to providing innovative investment and consulting opportunities for clients looking to capitalize on the growth of these rapidly evolving industries. Our team of experts has a deep understanding of the technology landscape, market trends. www.aiventuretech.com
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