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Is there an SEC AI rule for advisers and broker-dealers?
There is no standalone, comprehensive SEC rule that governs every use of AI by financial firms in the sources covered here. Instead, the applicable obligations depend on the firm, the activity, and the facts. Existing standards for broker-dealers and investment advisers—including Regulation Best Interest, Form CRS, and interpretations under the Investment Advisers Act—remain relevant when AI supports a recommendation, advice, or customer interaction. The SEC’s overview of these standards explains the conduct and transparency framework; it does not create an AI-specific code.
The predictive-data-analytics proposal was withdrawn
The SEC proposed rules addressing conflicts of interest associated with broker-dealers’ and investment advisers’ use of predictive data analytics. The Commission later withdrew those proposals, effective June 17, 2025, and said it did not intend to issue final rules on them. Any future action in those areas would start with a new proposal. Treat the proposal as withdrawn—not as a final rule or an operative set of requirements. SEC withdrawal notice
What the relevant SEC actions mean in practice
The rules and actions differ in status and scope. The distinctions matter: an enforcement settlement is not a new general AI rule, and a committee recommendation is not binding Commission action.
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| Area | What the SEC material establishes | What it does not establish |
|---|---|---|
| Predictive-data-analytics proposal | Withdrawn effective June 17, 2025; the SEC said it did not intend to finalize the proposal. SEC notice | A current rule imposing the proposal’s requirements. |
| AI-related marketing claims | In March 2024, the SEC announced settled charges against investment advisers Delphia (USA) Inc. and Global Predictions Inc. over false or misleading claims about purported AI use. The firms agreed to pay $400,000 in total civil penalties. The release also describes Marketing Rule violations. SEC enforcement release | A categorical ban on AI use, or a rule that every AI-related statement is unlawful. |
| Customer information | Regulation S-P amendments require covered firms to maintain written incident-response policies and procedures addressing unauthorized access to or use of customer information, including notification procedures in specified cases. SEC final rule | An AI-specific security regime. These are customer-information safeguards that may be relevant to an AI workflow. |
| AI disclosure recommendation | The Investor Advisory Committee approved a recommendation on disclosure of AI’s impact on operations on December 4, 2025. SEC committee material | A binding SEC rule or Commission requirement. |
AI claims must match what a firm actually does
The 2024 Delphia and Global Predictions matters illustrate how existing securities-law provisions can apply when advisers make false or misleading claims about AI. The SEC’s release describes Delphia’s claims from 2019 to 2023 about using AI and machine learning with client data in its investment process, and Global Predictions’ 2023 claims about its AI offerings. These were settled enforcement matters, not a general prohibition on using AI. Read the SEC’s account of the settlements.
In a statement dated March 18, 2024, then-Chair Gary Gensler said: “In essence, they should say what they’re doing, and do what they’re saying.” He also discussed truthful representations about using AI and, for public companies, having a reasonable basis for AI claims and informing investors of that basis, including relevant risks. This is a dated Chair statement, not a standalone regulation or a replacement for the governing law. Gensler’s statement
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Questions to check before making an AI claim
The following are practical questions drawn from the scope of the SEC materials, not a published SEC checklist:
- Does the product or process actually use AI in the way the firm’s statement implies?
- Are claims about the system’s role in investment decisions, client-data use, or capabilities supportable?
- Could the statement mislead customers or investors about what the firm does, how it does it, or the risks involved?
AI workflows that handle customer information
Regulation S-P applies to covered entities including broker-dealers, registered investment advisers, investment companies, funding portals, and certain transfer agents. Its amendments address safeguarding customer records and information, written incident-response policies and procedures for unauthorized access to or use of customer information, and notification to affected individuals in specified circumstances involving sensitive customer information. The amendments also require written records documenting compliance. The SEC’s final-rule overview describes these requirements.
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- Enough forms for 1 year for churches of approximately 150 members
- 5 3/16" x 9"
- Includes forms for church receipts, member contributions, and disbursements
For a firm using an AI service that processes customer information, the relevance is the information and how it is handled—not that the tool is AI. The cited rule is not presented as an AI-specific control framework. The SEC overview also does not supply implementation instructions for every deployment; firms should consult the operative rule text and applicable compliance dates for their circumstances.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to assess an AI use case
A useful first pass is to identify four things. This is an organizing framework based on the different scopes of the SEC materials, not an official SEC test:
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- Entity: Is the organization an investment adviser, broker-dealer, issuer, or another type of covered institution?
- Function: Is AI used for advice, recommendations, marketing, customer service, or internal operations?
- Communication or customer impact: What is being represented to customers or investors, and could it affect their understanding or decisions?
- Information handled: Does the workflow process customer information that brings safeguarding or incident-response obligations into view?
The answers help identify which existing conduct, marketing, disclosure, or customer-information provisions may matter. They do not determine a firm’s legal obligations on their own; application depends on the entity, activity, facts, and current controlling law.
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