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Bloomberg Law: FINRA Guides Firms to Build Investor Protections Around AI Tools

By June 7, 2024June 10th, 2024No Comments
BloombergLaw FINRA guides


Burgeoning use of generative artificial intelligence has touched nearly every industry, and financial services are no exception. Questions are brewing around the contours of regulating these innovations.

While AI use increases, the Financial Industry Regulatory Authority recently updated its advertising regulation FAQs offering compliance guidance for how broker-dealers can use AI chatbots and how to approach AI-created communications. FINRA often uses FAQs to guide use of emerging technologies absent specific regulation, or where formal rules for narrow use cases may not materialize. One crucial throughline of these FAQs is FINRA’s focus on investors—the intended audience for AI chatbots and AI-generated content.

For compliance teams, this focus essentially serves as a brightline rule. Whenever AI is deployed in a way that touches or interacts with investors, whether in the form of a chatbot or AI-generated content that’s shared with an investor—the constellation of FINRA rules applies.


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