Robo Feds: Securities and Exchange Commission SEC Will Use AI for ‘Market Surveillance’ and Regulatory Oversight

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The Securities and Exchange Commission (SEC) is embracing AI technologies to enhance “market surveillance” and assist in enforcement investigations.

The Wall Street Journal reports that in a recent Senate hearing, SEC Chair Gary Gensler revealed that the agency is actively using AI to monitor financial markets and aid in various enforcement investigations. This marks a significant step in the SEC’s approach to regulating the ever-evolving landscape of financial markets.

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“We already do in some market surveillance … to look for patterns in the markets,” Gensler told Senate lawmakers, emphasizing the agency’s proactive stance in utilizing advanced technologies for regulatory purposes.

While the SEC has often highlighted its data-driven methods for identifying manipulative or fraudulent trades, this is one of the first instances where the agency has openly discussed its own use of AI. The technology is not just a tool for hedge funds and investors anymore; it’s becoming a vital part of the regulatory framework.

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