FINRA Peeks Behind the Algorithm’s Curtain

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On the heels of the Financial Industry Regulatory Authority issuing a Report on Digital Investment Advice last month, on April 7 the Securities and Exchange Commission approved a FINRA rule amendment that requires registration of persons that are “primarily responsible for the design, development or significant modification of algorithmic trading strategies, or who are responsible for the day-to-day supervision or direction of such activities.” The fundamental proposition is that all algorithms are conceived and built by humans, and said humans should be both qualified and readily identifiable so they may be held accountable for any harm their creations cause. The […]

Five Not-So-Bold Regulatory Predictions for 2016

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I can’t guarantee much from my personal crystal ball, but looking across the regulatory horizon into 2016 there is one undeniable certainty: Securities attorneys will be just fine. The sheer volume of complicated rulemaking that is pouring out of Washington bodes well for billable hours but not for bottom lines. Only time will tell which (if any) of my other predictions below come to pass, but don’t fret about your JD friends…they’ll be anything but bored. Robo-Advisors: Skepticism and Scrutiny by the SEC Regulators’ skeptical attitude toward robo advice (and bias, some may argue) first reared its head in May […]

Are You an ‘Internet Adviser?’ A 10-Year-Old SEC Rule Predated Robo-Advisors

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The rulemaking phraseology of the SEC can be, at times, somewhat antiquated when it comes to the brave new world of the Internet and technology. To this day, there are references in the Advisers Act and the rules thereunder to, for example, “chat rooms,” “bulletin boards,” and “microfiche.” At the same time, it is unrealistic to expect the SEC to codify every new technological fad; in the race between blistering tech disruption and the sausage factory of government bureaucracy, tech always wins. That said, the SEC should be given significant credit for paving the regulatory pathway for what it refers […]