Comment Letter on SEC’s Proposed Rule on Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers, File Number S7-12-23

Authors

Sergio Alberto Gramitto Ricci, University of Missouri - Kansas City, School of LawFollow
Christina M. Sautter, Southern Methodist University Dedman School of LawFollow

Publication Date

10-9-2023

Document Type

Article

Abstract

This comment letter responds to the Securities and Exchange Commission’s proposed rule Release Nos. 34-97990; IA-6353; File Number S7-12-23 - Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers. Our comments draw on our scholarship relating to laypersons’ participation in securities markets and the corporate sector as well as on the role of technology in corporate governance.

We express concerns that the SEC’s proposed regulation undermines individuals’ ability to access capital markets in an efficient and cost-effective manner. In the era of excessive concentration of equities ownership and power, often with negative societal ramifications, we recommend that the SEC reconsiders the proposed rule and limits its application to only specific forms of technology such as certain iterations of artificial intelligence (AI). We also suggest that the SEC harness the power of technology to promote disclosure practices that consider the human nature of retail investors.

Recommended Citation

Sergio A. Gramitto Ricci & Christina M. Sautter, Comment Letter on SEC’s Proposed Rule on Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers, File Number S7-12-23, (2023).
Available at: https://irlaw.umkc.edu/faculty_works/930