United States: SEC requests comment on broker-dealer and investment adviser digital engagement practices

In brief

The US Securities and Exchange Commission (SEC) recently published a request for information and comment on how broker-dealers and investment advisers use digital engagement practices (DEPs) — behavioral prompts, differential marketing, "gamification," and other design elements and features that firms use to engage with retail investors through digital platforms and mobile applications.  

The SEC seeks input about the current use of DEPs, tools and methods such as predictive data analytics and artificial intelligence/machine learning models that firms may use to operate and customize DEPs based on investor behavior or characteristics, and how DEPs interact with existing regulatory requirements for broker-dealers and investment advisers. The SEC is also focused on how investment advisers use technology to develop and provide advice both through digital programs and more traditional advisory services.

Comments are due on 1 October 2021.

 


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