As Federal agencies with finance and market-related missions increasingly adopt more modern financial technologies (FinTech), Rep. Wiley Nickel, D-N.C., grilled a Securities and Exchange Commission (SEC) official today for what he said was lagging other agencies in promoting modernized technology to help investors.
During a House Financial Services Committee Digital Assets, Financial Technology, and Inclusion Subcommittee hearing, the lawmaker peppered Valerie Szczepanik, director of the Strategic Hub for Innovation and Financial Technology (FinHub) at the SEC, with questions about the agency’s rules to produce paper documents for investors.
“Knowing that an overwhelming majority – 79 percent – of retail investors have opted to receive investment-related documents electronically, can you please explain why the SEC rules still require an investor to receive paper documents when they open new investment accounts, and why hasn’t your office push to update these rules,” Rep. Nickel asked.
“We will continue to pull people in and try to talk about new technologies in this area,” Szczepanik responded.
Rep. Nickel is a cosponsors of the Improving Disclosure for Investors Act of 2023 – that aims to modernize for electronic delivery of paperwork to investors and businesses alike.
The House member also talked about a proposed SEC rule that would require broker-dealers to take steps to address conflicts of interest using predictive data analytics tools such as AI.
“The proposal scope is extremely broad and could be applied to virtually any technology used by broker dealers and investment advisors,” stated Rep. Nickel.
