AI in action · Regulation
SEC Official Tells Advisers Not to Wait for AI Rules
Brian Daly, head of the SEC's Investment Management Division, told advisers to adopt AI responsibly rather than wait for guidance that may be late and narrow. Advisers blocked by a rule should ask the SEC.
The Securities and Exchange Commission's top official for investment advisers and funds has told the industry to stop waiting for permission. Speaking at a Stanford University private capital roundtable, Brian Daly, director of the SEC's Division of Investment Management, said advisers should not hold back on AI until regulators issue guidance, because that guidance may come late and be narrow, Law360 reported on October 19.
Daly said he had seen "more trepidation" among advisers about deploying AI than was warranted. Adopting "super intelligence", the term the administration has told agencies to use, is "worth the discomfort of leaving the status quo" if it is "done thoughtfully", he said. Where a specific law, rule or SEC staff position stands in the way of using an AI tool, advisers should contact the agency so the obstacle can be addressed.
His argument rests on existing law rather than new rules. Advisers already owe clients a fiduciary duty, which is principles-based and has adapted to earlier technologies, he said, and he called for a "system of intelligent safeguards" so that market participants can make informed choices about how much risk they accept. The speech was mostly about another priority, widening retail investors' access to private and alternative assets.
It marks a clear turn from the previous SEC. In 2023 the commission proposed rules on how brokers and advisers use predictive data analytics, including AI, to interact with investors; the proposal was withdrawn in 2025 after Paul Atkins became chairman. Former commissioner Hester Peirce, who left the agency this month, described the feedback on it as "not great" and called the proposal unworkable and "anti-technology", according to Law360.
Encouragement is not exemption. On October 23 the SEC's Division of Examinations listed AI among its priorities for fiscal 2027, including whether automated tools give advice consistent with investors' profiles and whether firms can resist AI-generated fraud, and its earlier priorities warned against "AI washing", overstating what a firm's AI does. For clients, the practical point is that an adviser using AI remains fully responsible for the advice, and is entitled to be asked how the tool is supervised.
Sources: Law360 — SEC official tells advisers not to wait for AI guidance (Oct 19, 2026); US News / Reuters — Wall Street regulator to focus on AI, private assets in corporate exams (Oct 23, 2026)