The Securities and Exchange Commission has issued a new draft to restrict the use of AI tools by securities firms

CTOnews.com, July 27 (Xinhua)-- the Securities and Exchange Commission (SEC) voted on Wednesday to introduce new draft rules that require all listed companies to disclose timely cyber hacking attacks to the public, while also restricting the use of AI tools by securities firms to avoid conflicts of interest with customers.

SEC said that the implementation of the new draft is mainly due to the "meme stock" incident in 2021, a "retail war against Wall Street", which took advantage of communities such as Reddit to stir up some stocks such as GameStop.

In the course of its investigation, SEC found that brokerage investment advisory software and securities brokers used artificial intelligence and similar online games to "encourage" retail investors to go on a buying spree.

Wall Street brokers and asset managers need to assess whether there is a conflict of interest when using data analysis or AI tools. SEC requires these companies to eliminate or otherwise resolve any conflicts of interest and not to put their own interests above those of investors. They must also strengthen their written commitments to ensure that they abide by the rules.

CTOnews.com is here to attach an official link to SEC, which interested users can click to read.