MFA and Coalition of Industry Groups Submit Comment Letter to SEC on Proposed Rules on Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers

MFA and 15 other industry groups submitted a letter to the U.S. Securities and Exchange Commission (SEC) requesting a 60-day extension of the comment period for the proposed rules on conflicts of interest associated with the use of predictive data analytics by broker-dealers and investment advisers.

The letter highlights that while the proposal focuses on predictive data analytics, its implications extend to potentially altering established precedent concerning conflict mitigation in alignment with investment advisers’ fiduciary duties and the Commission’s recent standards for broker-dealers under Regulation Best Interest. The signatories emphasize the importance of sufficient time for thorough analysis and commentary on how the proposal might affect these existing legal duties and standards.

Additionally, the letter expresses concerns about the proposal’s broad and technology-neutral scope, suggesting that the restrictions within it could negatively affect firms’ use of technology. The signatories argue that the proposal misunderstands the role of technology in enhancing reporting capabilities, efficiencies, and cost reduction. They assert that an extended comment period is necessary to allow the public to comprehensively evaluate the proposal’s extensive coverage and potential implications.