The Financial Technology Association (FTA) has issued a statement on the Protecting Innovation in Investment Act. The FTA supports the legislation, explaining that it will support consumers ability to benefit from wealth-building services by blocking the Securities and Exchange Commission (SEC) from undermining tech advancement in financial services.
The legislation is brief, stating that:
The Securities and Exchange Commission may not finalize, implement, or enforce the proposed rule of the Commission entitled ‘‘Conflicts of Interest Associated With the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers.
The current leadership at the Commission has not been very Fintech friendly, focusing mainly on investor protection concerns while attempting to expand its responsibilities into non-securities-related rules. The SEC claims the rules will “eliminate, or neutralize the effect of, certain conflicts of interest associated with broker-dealers’ or investment advisers’ interactions with investors through these firms’ use of technologies that optimize for, predict, guide, forecast, or direct investment-related behaviors or outcomes.”
Introduced into the Senate Commerce Committee, Senators Ted Cruz and Bill Hagerty are the bill’s sponsors.
FTA President and CEO Penny Lee said that millions of Americans benefit from digital tools to help them invest and build wealth for the future.
“Unfortunately, the SEC’s overly broad predictive data analytics rule threatens to reverse this progress and bring us back to the era of faxes and typewriters. We appreciate the leadership of Senators Cruz and Hagerty for proposing legislation that would compel the SEC to pause and reconsider this harmful rule.”
The FTA previously submitted a comment letter on the proposed rules that said the language was overly broad and could curtail Fintech which lowers costs and helps smaller investors. or millions of Americans.
The FTA shares that other interested parties have voiced support for the legislation including the American Council of Life Insurers (ACLI), American Investment Council (AIC), American Securities Association (ASA), Alternative Investment Management Association (AIMA), U.S. Chamber of Commerce, Financial Services Institute, Inc. (FSI), Institute for Portfolio Alternatives (IPA), Insured Retirement Institute (IRI), Investment Company Institute (ICI), Loan Syndications and Trading Association (LSTA), MFA, National Association of Insurance and Financial Advisors (NAIFA), National Bankers Association (NBA), and Securities Industry and Financial Markets Association (SIFMA).