Dive Brief:
- Acting Securities and Exchange Commission Chairman Mark Uyeda on Thursday called for a softer agency approach to artificial intelligence regulation, reflecting a broader push in the Trump administration.
- Speaking at an AI event hosted by the SEC in Washington, Uyeda said the agency should generally avoid “overly prescriptive” AI rules that can quickly become outdated and impede innovation.
- “I have been concerned with some recent commission efforts that might effectively place unnecessary barriers on the use of new technology,” he said.
Dive Insight:
Uyeda’s comments follow actions taken by President Donald Trump that have effectively upended the U.S. approach to AI policy under his predecessor, Joe Biden, according to analysts.
They also align with views expressed by Paul Atkins, Trump’s pick to lead the SEC on a permanent basis, on how the agency should approach rule makings in general.
“Regulation ideally should be smart, effective, and appropriately tailored within the confines of the regulator’s statutory authority,” Atkins said at a Thursday confirmation hearing. “In short, clear rules of the road benefit all market participants.”
In late January, Trump signed an executive order affirming his administration’s commitment to solidifying America’s AI dominance globally. He also called for federal agency heads to review Biden-era AI policies and regulations and revoke any that might act as a barrier to U.S. innovation in the space.
The move came just days after Trump repealed a sweeping AI executive order by Biden.
In July 2023, former SEC Chair Gary Gensler, a Biden appointee, announced a proposal to require broker-dealers and investment advisers to take steps to address “conflicts of interest” associated with their use of predictive data analytics and similar technologies.
“Given the scalability of these technologies and the potential for firms to reach a broad audience at a rapid speed, any resulting conflicts of interest could cause harm to investors in a more pronounced fashion and on a broader scale than previously possible,” Gensler said at the time.
Serving as a minority commissioner at the time, Uyeda slammed the proposal, saying it would impose a “highly prescriptive process for evaluating, testing, and documenting a firm’s use of the covered technology with respect to conflicts of interest.” He also said the proposal was “breathtakingly broad in its reach.”
In his Thursday remarks, Uyeda said the commission must “prioritize effective and cost-efficient regulations” in the AI space.
“To the extent that advances in technology, such as AI, create potential gaps in our regulatory structure or point to the need for additional guidance, it is the commission’s responsibility to address those gaps or provide guidance in ways that encourage innovation while protecting investors,” he said.
