The SEC has no AI-specific rule in force. Its July 26, 2023 proposal on conflicts of interest from broker-dealers' and advisers' use of predictive data analytics (Release 34-97990) was formally withdrawn on June 12, 2025, and the agency has said any future action would start with a new proposal. What actually binds bank securities arms today is enforcement of existing antifraud, fiduciary, Regulation Best Interest, and Marketing Rule obligations against 'AI washing' — starting with the $400,000 Delphia and Global Predictions settlements on March 18, 2024 — plus Division of Examinations priorities for FY2025 and FY2026 that test whether AI claims are accurate and whether AI used in fraud detection, AML, back-office, and trading is supervised.
| Full name | U.S. Securities and Exchange Commission |
| Role | Securities markets regulator and public-company disclosure authority |
| Force on banks | Supervisory guidance |
| Applies to | Bank-affiliated broker-dealers and registered investment advisers (wealth, asset-management, and capital-markets arms), and any bank holding company that files with the SEC as a public company |
| Key document | Division of Examinations FY2026 Examination Priorities (Nov 17, 2025) — the operative statement of what SEC examiners test on AI |
| Latest move | Chairman Atkins told the FSOC AI roundtable on March 4, 2026 that AI disclosure will be governed by materiality, not new line items, and that AI-washing enforcement continues |
| Documents tracked | 10 · all documents → |
For a bank, the SEC matters through two doors. The first is the bank's broker-dealer and registered investment adviser subsidiaries, which sit under Regulation Best Interest, the Advisers Act fiduciary duty, the Marketing Rule, and the SEC's examination program. The second is public-company disclosure: bank holding companies that file 10-Ks and 10-Qs must describe material AI use and risk accurately, and the SEC has charged issuers for overstating AI capabilities.
Under Chair Gary Gensler the SEC pursued a rulemaking track — the 2023 predictive data analytics ('PDA') proposal would have required firms to identify and eliminate or neutralize conflicts arising from any 'covered technology' used in investor interactions. Under Chairman Paul Atkins the Commission withdrew that proposal in June 2025, created an internal AI Task Force in August 2025 (led by Chief AI Officer Valerie Szczepanik), and has said that AI disclosure should be governed by existing materiality principles rather than new line items. The Investor Advisory Committee's December 4, 2025 recommendation for AI disclosure guidance has not been acted on.
The practical constant across both administrations is enforcement. The Cyber and Emerging Technologies Unit created February 20, 2025 lists AI-enabled fraud as a core focus, and the Commission has brought 'AI washing' cases against advisers (Delphia, Global Predictions), a public company (Presto Automation, January 14, 2025), and a private-company founder (Nate's Albert Saniger, April 9, 2025). Examiners ask the same questions of bank-owned firms: are your AI representations accurate, and do your policies actually supervise the AI you use.
What has the SEC actually published on AI?
| Date | Document | Status |
|---|---|---|
| Mar 4, 2026 | Atkins remarks at FSOC AI roundtable (Mar 2026) — Remarks at Financial Stability Oversight Council Artificial Intelligence Innovation Series Roundtable on Strategy and Governance Principles | Final |
| Dec 4, 2025 | Investor Advisory Committee AI disclosure recommendation — Recommendation of the SEC Investor Advisory Committee Regarding the Disclosure of Artificial Intelligence's Impact on Operations | Final |
| Nov 17, 2025 | Division of Examinations FY2026 Priorities — Examination Priorities: Fiscal Year 2026 — Division of Examinations | In force |
| Jun 12, 2025 | SEC withdrawal of proposed rules (33-11377) — Withdrawal of Proposed Regulatory Actions — including the predictive data analytics conflicts proposal | Final |
| Apr 9, 2025 | SEC v. Saniger (Nate, Inc.) — SEC Charges Founder of Nate, Inc. with Fraud Over False Claims About the Company's Use of Artificial Intelligence | Final |
| Jan 14, 2025 | Presto Automation AI-washing order — SEC Charges Restaurant-Technology Company Presto Automation for Misleading Statements About AI Product | Final |
| Oct 21, 2024 | Division of Examinations FY2025 Priorities — Examination Priorities: Fiscal Year 2025 — Division of Examinations | Superseded |
| Mar 18, 2024 | Delphia / Global Predictions AI-washing settlements — SEC Charges Two Investment Advisers with Making False and Misleading Statements About Their Use of Artificial Intelligence | Final |
| Feb 13, 2024 | Gensler 'AI washing' remarks at Yale (Feb 2024) — AI, Finance, Movies, and the Law — Prepared Remarks Before the Yale Law School | Final |
| Jul 26, 2023 | SEC Predictive Data Analytics proposal (34-97990) — Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers — proposed rule | Withdrawn |
| Date | Type | Document / event |
|---|---|---|
| Mar 4, 2026 | Speech | Atkins remarks at FSOC AI roundtable (Mar 2026) — Remarks at Financial Stability Oversight Council Artificial Intelligence Innovation Series Roundtable on Strategy and Governance Principles. Speaking at the Financial Stability Oversight Council's AI Innovation Series roundtable on March 4, 2026, SEC Chairman Paul Atkins laid out the current SEC posture on AI: the agency's own AI Task Force (created August 2025) is building tools for exam risk assessment, misconduct detection, and disclosure review, but 'algorithmic detection of possible misconduct… cannot serve as the sole basis of an SEC enforcement action.' On disclosure, he said principles-based, materiality-rooted rules should govern AI just as any other development, that 'prescriptive mandates are not the answer to every emerging technology,' and that AI-washing enforcement continues because 'misconduct remains misconduct, regardless of the medium.' source ↗ |
| Dec 4, 2025 | Report | Investor Advisory Committee AI disclosure recommendation — Recommendation of the SEC Investor Advisory Committee Regarding the Disclosure of Artificial Intelligence's Impact on Operations. On December 4, 2025 the SEC's Investor Advisory Committee approved a recommendation that the Commission issue guidance requiring issuers to (1) adopt a definition of 'artificial intelligence', (2) disclose board oversight mechanisms, if any, for AI deployment, and (3) if material, report separately on how AI is deployed and its effects on internal operations and on consumer-facing matters. source ↗ |
| Nov 17, 2025 | Report | Division of Examinations FY2026 Priorities — Examination Priorities: Fiscal Year 2026 — Division of Examinations. The FY2026 Examination Priorities, released November 17, 2025, keep AI and automated investment tools as an 'Emerging Financial Technology' focus. source ↗ |
| Aug 1, 2025 | Milestone | SEC AI Task Force launched; Valerie Szczepanik named Chief AI Officer. An internal task force to deploy AI across the SEC's own operations — risk assessment for examinations, misconduct detection, disclosure review, and comment analysis. It is not a rulemaking body, but it signals how the agency will surveil registrants. |
| Jun 12, 2025 | Regulation | SEC withdrawal of proposed rules (33-11377) — Withdrawal of Proposed Regulatory Actions — including the predictive data analytics conflicts proposal. On June 12, 2025 the SEC issued Release Nos. source ↗ |
| Apr 9, 2025 | Enforcement | SEC v. Saniger (Nate, Inc.) — SEC Charges Founder of Nate, Inc. with Fraud Over False Claims About the Company's Use of Artificial Intelligence. On April 9, 2025 the SEC sued Albert Saniger, founder and former CEO of shopping-app startup Nate, Inc., in the Southern District of New York for raising more than $42 million from investors between 2019 and December 2022 by claiming the app used AI to complete purchases without human involvement, when in fact contract workers manually processed orders. source ↗ |
| Feb 20, 2025 | Milestone | Cyber and Emerging Technologies Unit (CETU) created. The SEC replaces its Crypto Assets and Cyber Unit with a roughly 30-person Cyber and Emerging Technologies Unit led by Laura D'Allaird; 'fraud committed using emerging technologies, such as artificial intelligence and machine learning' is named as a priority area. |
| Jan 14, 2025 | Enforcement | Presto Automation AI-washing order — SEC Charges Restaurant-Technology Company Presto Automation for Misleading Statements About AI Product. On January 14, 2025 the SEC settled its first AI-washing case against a public company. source ↗ |
| Oct 21, 2024 | Report | Division of Examinations FY2025 Priorities — Examination Priorities: Fiscal Year 2025 — Division of Examinations. Released October 21, 2024, the FY2025 Examination Priorities named artificial intelligence a headline risk area alongside fiduciary duty, standards of conduct, and cybersecurity. source ↗ |
| Mar 18, 2024 | Enforcement | Delphia / Global Predictions AI-washing settlements — SEC Charges Two Investment Advisers with Making False and Misleading Statements About Their Use of Artificial Intelligence. On March 18, 2024 the SEC announced settled charges against investment advisers Delphia (USA) Inc. source ↗ |
| Feb 13, 2024 | Speech | Gensler 'AI washing' remarks at Yale (Feb 2024) — AI, Finance, Movies, and the Law — Prepared Remarks Before the Yale Law School. On February 13, 2024 SEC Chair Gary Gensler used a Yale Law School speech to put 'AI washing' on the record as a securities-law problem: public companies and investment advisers that overstate their AI use or make boilerplate AI disclosures risk violating the antifraud provisions. source ↗ |
| Jul 26, 2023 | Consultation | SEC Predictive Data Analytics proposal (34-97990) — Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers — proposed rule. On July 26, 2023 the SEC proposed rules (Release 34-97990, File No. source ↗ |
- Whether the Commission responds to the Investor Advisory Committee's December 2025 AI disclosure recommendation with staff guidance, or leaves issuers on materiality alone as Chairman Atkins signalled
- Further CETU 'AI washing' actions, particularly any first case against a bank-affiliated broker-dealer or adviser under Reg BI or the Marketing Rule
- FY2027 Division of Examinations priorities (expected in autumn 2026) and whether the AI section adds generative-AI or agentic-tool supervision expectations
- Any new proposal replacing the withdrawn predictive data analytics rule — the SEC has said it would start from scratch with a new notice
Does the SEC have an AI rule that applies to a bank's broker-dealer or adviser?
No. The only AI-specific rulemaking — the July 2023 predictive data analytics conflicts proposal (Release 34-97990) — was withdrawn on June 12, 2025. Bank securities arms are instead held to existing rules: Regulation Best Interest, the Advisers Act fiduciary duty, the Marketing Rule, antifraud provisions, and supervision and recordkeeping requirements, all of which the SEC applies to AI use.
What is 'AI washing' and what has the SEC done about it?
AI washing is overstating or fabricating the use of artificial intelligence in products, services, or investment processes. The SEC settled with advisers Delphia and Global Predictions for $225,000 and $175,000 on March 18, 2024, brought its first public-company case against Presto Automation on January 14, 2025, and sued Nate founder Albert Saniger on April 9, 2025 alongside a parallel criminal case.
What do SEC examiners look at when a firm uses AI?
The FY2025 and FY2026 examination priorities say examiners will check that AI representations are accurate, that operations and controls match what was disclosed to investors, that algorithms produce advice consistent with client profiles, and that firms have policies to supervise AI used in fraud prevention, back-office operations, AML, and trading. FY2025 also flagged loss or misuse of client data through third-party AI models.
Follow every move these regulators make
6 curated AI stories for banking executives · Every morning · Free
Subscribe to BankingNewsAI →