The Financial Technology Association (FTA) joined a group of trade associations to express concerns with the Securities and Exchange Commission’s (the “Commission”) proposed rule regarding Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment. As the trade associations wrote:
“On behalf of our members who represent investors, market participants, and other stakeholders across the U.S. capital markets, we request the Commission withdraw the Proposal. While we support appropriate regulatory frameworks that protect investors, we find this Proposal unnecessary, inadequately reasoned and fatally flawed. We are also concerned that the Commission lacks statutory authority to adopt these rules. This concern is especially heightened when the same authority relied upon in the Proposal is currently pending court review.”
“In the guise of addressing speculative concerns relating to predictive data analytics, the Commission would dramatically change how advisers and broker-dealers interact with investors. The Commission’s proposed imposition of onerous requirements on advisers’ and broker-dealers’ use of technology to run their day-to-day businesses and better serve investors will only serve to harm the very investors the Commission purports to help. Further, with this Proposal, the Commission has effectively determined that the adoption of any new technology will be subject to whatever regulatory conditions the Commission determines are appropriate.”