FTA Raises Major Concerns with SEC’s Overly Broad Predictive Data Analytics Rule
WASHINGTON, D.C. – The Financial Technology Association (FTA) submitted a comment letter expressing serious concerns with the Securities and Exchange Commission’s (SEC) proposed rule restricting the use of predictive data analytics by broker-dealers and investment advisers. The proposal penalizes firms adopting modern technologies and takes an overly broad and duplicative approach that would limit everyday investors’ access to low-cost, transparent, and innovative services.
“This proposed rule risks rolling back the clock on the use of technology in investment services,” said Penny Lee, President and Chief Executive Officer of the Financial Technology Association. “Rather than trying to return to the stone ages of analog and telephone-based investment advice, the SEC should encourage the adoption of new tools and technologies that open up opportunities for all investors. We urge the SEC to reconsider and withdraw this harmful rule.”
For decades, broker-dealers and investment advisors have relied on Internet and mobile-based technology to enhance investment offerings. However, the SEC’s proposed definition of “covered technology” is excessively broad, potentially encompassing all forms of technology except for traditional communication methods like the telephone and postal mail. Recent developments in the market do not warrant a need for a new framework, as the SEC has substantial authority to identify and take action against problematic practices through existing rules. The SEC has proven through past enforcement actions that it can prevent harmful practices that negatively impact investors.
Technology-driven financial services have significantly improved financial markets by increasing competition, improving efficiency, reducing costs, and broadening market participation. The use of technology in investing has played a crucial role in wealth generation for millions of Americans over the past ten years, with the potential to further close the wealth gap in the United States through continued innovation. Read FTA’s Just the Facts: Expanding Investment Access and Opportunity to learn more.
The Financial Technology Association (FTA) is a Washington, DC-based trade association representing industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
FTA Raises Major Concerns with SEC’s Overly Broad Predictive Data Analytics Rule
WASHINGTON, D.C. – The Financial Technology Association (FTA) submitted a comment letter expressing serious concerns with the Securities and Exchange Commission’s (SEC) proposed rule restricting the use of predictive data analytics by broker-dealers and investment advisers. The proposal penalizes firms adopting modern technologies and takes an overly broad and duplicative approach that would limit everyday investors’ access to low-cost, transparent, and innovative services.
“This proposed rule risks rolling back the clock on the use of technology in investment services,” said Penny Lee, President and Chief Executive Officer of the Financial Technology Association. “Rather than trying to return to the stone ages of analog and telephone-based investment advice, the SEC should encourage the adoption of new tools and technologies that open up opportunities for all investors. We urge the SEC to reconsider and withdraw this harmful rule.”
For decades, broker-dealers and investment advisors have relied on Internet and mobile-based technology to enhance investment offerings. However, the SEC’s proposed definition of “covered technology” is excessively broad, potentially encompassing all forms of technology except for traditional communication methods like the telephone and postal mail. Recent developments in the market do not warrant a need for a new framework, as the SEC has substantial authority to identify and take action against problematic practices through existing rules. The SEC has proven through past enforcement actions that it can prevent harmful practices that negatively impact investors.
Technology-driven financial services have significantly improved financial markets by increasing competition, improving efficiency, reducing costs, and broadening market participation. The use of technology in investing has played a crucial role in wealth generation for millions of Americans over the past ten years, with the potential to further close the wealth gap in the United States through continued innovation. Read FTA’s Just the Facts: Expanding Investment Access and Opportunity to learn more.
Read FTA’s full comment letter here.
ABOUT US
The Financial Technology Association (FTA) is a Washington, DC-based trade association representing industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.