The Securities and Exchange Commission (SEC), Investor Advisory Committee (IAC), has scheduled a meeting for June 6th. Topics include artificial intelligence (AI) and the ongoing discussion of investment advice.
Regarding investment advice, the Committee worries that younger investors are receiving guidance from “non-traditional ways,” including social media. FINRA reports that around 60% of under 35s get information from social media and “influencers.”
As for AI, the panel will discuss the inevitability of this tech being integrated into financial services. The panel will “discuss and provide insights on how the SEC may promote the advancement of AI by helping practitioners navigate these critical aspects.”
As for other topics, the IAC may finally provide some insight into their pending recommendation on the definition of an Accredited Investor. The IAC discussed the topic and potential recommendations during a meeting in September of 2023. At that time, the IAC appeared to align with the SBFAC recommendation to expand the definition to make it more inclusive and less discriminatory. It will be interesting to see if the IAC will recommend a path for more investors to be deemed Accredited or if it will bend to the will of the current SEC leadership.
The agenda is below, and the meeting will be live-streamed on the SEC website and will be open to the public.
U.S. Securities and Exchange Commission
Investor Advisory Committee
Thursday, June 6, 2024
10:00 a.m. – 10:05 a.m. | Welcome |
10:05 a.m. – 10:30 a.m. | Opening Remarks |
10:30 a.m. – 10:35 a.m. | Approval of Previous Meeting Minutes |
10:35 a.m. – 12:05 p.m. | Panel Discussion: Examining the New Frontier for Investment Advice
As noted in recent studies by CFA Institute and FINRA, many young investors and investors of color are getting increasingly involved in the securities markets. However, these newer investors are accessing investment advice in non-traditional ways, specifically through social media. The FINRA Foundation found that 60% of investors younger than 35 are getting investing information from social media. The Investors of Color study found that these investors are more likely than white investors to rely on social media, mobile trading apps and online videos for investment advice. While there is undoubtedly helpful and educational information available through social media, some “finfluencers” are promoting strategies that are inappropriate for many investors. These platforms have very low barriers to entry, making them appealing to scammers as well as people that have hidden agendas and/or undisclosed conflicts. The Investor Advisory Committee panel will explore whether the existing regulatory framework is sufficient to protect investors obtaining investment advice through social media. Moderated by:
Panelists:
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12:05 p.m. – 1:35 p.m. | Lunch/Non-Public Administrative Session |
1:35 p.m. – 3:05 p.m. | Panel Discussion: AI Regulation: Embracing the Future
The rapid advancements in AI technologies have brought about significant benefits and challenges for companies, investment managers and other market participants. As AI becomes increasingly integrated into various sectors, it is crucial to address key issues related to disclosures, and other important aspects of AI such as data controls, bias, and education to ensure ethical and responsible AI practices within the existing regulatory framework and within any new guidance or rules. This panel aims to discuss and provide insights on how the SEC may promote the advancement of AI by helping practitioners navigate these critical aspects. Moderated by:
Panelists:
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3:05 p.m. – 3:50 p.m. | Discussion of a Recommendation Regarding the Protection of Self-Directed Investors When Trading Complex Products and Utilizing Complex Strategies |
3:50 p.m. – 4:20 p.m. | Discussion of a Recommendation on Financial Literacy and Investor Education |
4:20 p.m. – 4:40 p.m. | Subcommittee and Working Group Reports |
4:40 p.m. | Closing Remarks |