SEC Aims to Standardize AI-Related Disclosures Across Industries

The Securities and Exchange Commission (SEC) is set to explore the harmonization of artificial intelligence (AI) disclosures and address concerns over retail investor fraud in an upcoming public meeting scheduled for March 6. The discussions will take place at the SEC Headquarters in Washington, D.C., and will be streamed live on the SEC’s official website.

According to the SEC’s announcement on Thursday (Feb. 27), the meeting will be conducted by the Investor Advisory Committee (IAC), which provides guidance on regulatory priorities and investor protection initiatives to uphold the integrity of U.S. securities markets.

Focus on AI Disclosure Standardization

One of the key topics of discussion, titled “Disclosure of Artificial Intelligence’s Impact on Operations,” will address the inconsistencies in how industries report AI-related risks and opportunities. The panel will explore ways in which the SEC can standardize AI-related disclosures, ensuring investors receive consistent and comprehensive information.

“This discussion will bring together various stakeholders to assess how AI is affecting corporate operations and financial reporting,” the meeting agenda noted. The aim is to create a more transparent AI disclosure framework that aligns with investor needs.

Combatting Retail Investor Fraud in the AI Era

The second panel, “Retail Investor Fraud in America,” will focus on the growing threat of fraud targeting retail investors, particularly as fraudsters increasingly leverage AI and other advanced technologies to deceive individuals at an alarming rate.

Experts, including securities regulators and fraud specialists, will share insights into the mechanics of these fraudulent schemes and discuss ongoing efforts to combat them. The session will conclude with a moderated discussion featuring audience participation.

SEC’s New Fraud Protection Unit

In a related development, the SEC announced on Feb. 20 the launch of the Cyber and Emerging Technologies Unit (CETU), a dedicated division aimed at safeguarding retail investors from fraudulent activities. Comprising approximately 30 fraud specialists and legal experts, CETU will focus on AI-driven fraud, social media scams, dark web schemes, hacking threats, and deceptive online platforms.

“This unit will not only enhance investor protection but also foster capital formation and market efficiency by enabling innovation to thrive,” said Mark Uyeda, the SEC’s acting chair, in a press statement.

With AI playing an increasingly pivotal role in financial markets, the SEC’s efforts to standardize AI disclosures and tackle investor fraud mark a crucial step in ensuring transparency, security, and investor confidence.