SEC IM Director Brian Daly Delivers Remarks at ABA Event

In early December, Securities and Exchange Commission (SEC) Director of the Division Investment Management, Brian Daly, delivered remarks covering the Division’s regulatory efforts. In his speech he noted efforts are centered around four key themes: a general deregulatory effort; initiatives that modernize markets; increasing access to alternative investments; and promoting the use of artificial intelligence. While discussing the retailization of private markets, Director Daly noted “markets and investors may be better served by a thoughtful and incremental reconsideration of our existing regulatory framework across different access points, investment structures, and disclosure requirements.” Director Daly remarked that instead of installing “another prescriptive regulatory regime” or orchestrating “a bunch of examinations and enforcement actions to establish de facto substantive limits,” the Division was instead focused on allowing the industry the space to innovate. He added that going forward, the Division will be focused on targeted actions followed by staff observations and engagement.  

On AI, Director Daly stated the technology has the capacity to “transform disclosure and the investor experience.” He listed a few questions the Division will be looking at as they examine the use of AI including whether marketing material is impacted, whether it constitutes investment advice, and who bears liability, among other questions.   

Director Daly commented “[i]f you want to innovate, this is the Commission that you have been waiting for.”  

Click here to read Director Daly’s speech.