SEC to Increase Scrutiny of AI Tools Used by Brokers, Advisers

The US Securities and Exchange Commission’s examiners will step up scrutiny of financial firms’ use of artificial intelligence next year, the latest sign of regulators’ growing concerns about the emerging technologies.

Investment advisers, brokers, clearing agencies and others can expect the SEC to focus on their statements about AI tools to ensure they comply with agency rules, according to a Division of Examinations report published Monday. The regulator will also look into how firms supervise the use of the technologies for tasks tied to trading, fraud prevention and anti-money-laundering policies.

Although the agency put AI risks on its examination ...