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United States: SEC requests comment on broker-dealer and investment adviser digital engagement practices

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In brief

The US Securities and Exchange Commission (SEC) recently published a request for information and comment on how broker-dealers and investment advisers use digital engagement practices (DEPs) — behavioral prompts, differential marketing, “gamification,” and other design elements and features that firms use to engage with retail investors through digital platforms and mobile applications.  

The SEC seeks input about the current use of DEPs, tools and methods such as predictive data analytics and artificial intelligence/machine learning models that firms may use to operate and customize DEPs based on investor behavior or characteristics, and how DEPs interact with existing regulatory requirements for broker-dealers and investment advisers. The SEC is also focused on how investment advisers use technology to develop and provide advice both through digital programs and more traditional advisory services.

Comments are due on 1 October 2021.

Click here to download the Full Alert.

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Amy serves as the Co-chair of Baker McKenzie's North American Financial Regulation and Enforcement Practice, which provides our clients with a full range of regulatory advice and enforcement counseling. Amy also serves on the steering committees of the Firm's Global Financial Services Regulatory and Global Financial Institutions Groups. Previously, Amy has served as chief litigation counsel at the US Securities and Exchange Commission's (SEC) Philadelphia regional office and managed a team of lawyers overseeing a wide variety of enforcement matters.

Author

Jennifer L. Klass serves as the co-chair of Baker McKenzie's North America Financial Regulation and Enforcement Practice, which provides clients with a full range of regulatory advice and enforcement counseling. Jen is an experienced financial services regulatory lawyer with particular focus on investment adviser regulation and the convergence of investment advisory and brokerage services. She regularly represents clients before the US Securities and Exchange Commission (SEC), both in seeking interpretative guidance and in managing examination and enforcement matters.

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