AI at the SEC: An Interview With Brian Daly, Director of the Division of Investment Management

Brian Daly, Director of the Division of Investment Management at the Securities and Exchange Commission, outlines how the agency integrates artificial intelligence into its regulatory framework. The SEC prioritizes a principles-based approach, emphasizing that AI functions as a tool subject to existing fiduciary duties of care and loyalty rather than requiring entirely new, technology-specific regulations. The commission is actively modernizing its own operations, including adopting AI-friendly document formatting to improve accessibility for retail investors. While the agency encourages innovation to reduce friction and enhance financial access, it remains vigilant against fraud and the risks of over-reliance on automated systems. Current regulatory efforts focus on maintaining technology-neutral standards that allow for industry growth while ensuring robust investor protection. The discussion highlights the ongoing shift toward electronic communication and the potential for AI agents to simplify complex financial disclosures for the public.