U.S. SEC Chair: AI Will Redefine Capital Market Regulation and Crack Down on Fraudulent or Exaggerated Promotions Using AI

Odaily Planet Daily reports that SEC Chairman Paul Atkins stated at the Financial Stability Oversight Council’s AI Innovation Roundtable that AI will reshape capital market regulation. The SEC established an AI working group in August this year to promote the application of artificial intelligence in risk assessment, market anomaly monitoring, information disclosure review, and market risk analysis. In terms of regulatory approach, the SEC will adhere to a “technology-neutral” stance and an information disclosure framework based on the “materiality principle.” It opposes simple checklist-style mandatory disclosure requirements for new technologies. Actions involving AI-based fraud or exaggerated promotion will be prosecuted according to law. Paul Atkins added that as a regulatory agency, the SEC will not shy away from the AI wave but will choose to understand, evaluate, and adopt relevant technologies when appropriate. He also encourages market participants and regulators to maintain open dialogue to jointly promote the healthy development of capital markets.