The lawmakers raised concerns about investor protection, accountability, and market oversight, and requested information on the agency's existing safeguards, registration requirements, and whether additional authority from Congress is needed to regulate the technology.
AI Trading Agents Draw Fresh Scrutiny
A group of Democratic lawmakers in the US House of Representatives is urging the Securities and Exchange Commission (SEC) to explain how it plans to regulate the growing use of artificial intelligence-powered trading tools.
In a letter to SEC Chair Paul Atkins, the lawmakers warned that AI trading agents are raising serious concerns about investor protection, market integrity, and accountability as they become more widely used by retail investors.
Press release from Congressman Bill Foster
The lawmakers said AI-powered trading is expected to expand beyond stocks into products like cryptocurrencies, options, futures, and event contracts. This makes it very important for regulators to establish clear oversight. They argued that many of these AI agents are already making big investment decisions while operating largely outside the existing securities regulatory framework.
Many major financial platforms are already introducing AI-powered investment tools. Earlier this month, Coinbase launched an AI trading assistant integrated into its app, and described it as a financial adviser registered with both the SEC and the Commodity Futures Trading Commission (CFTC).
The lawmakers also pointed out that many AI trading platforms include disclaimers stating they cannot guarantee the accuracy of AI-generated recommendations or fully monitor how the systems make decisions. They said these disclosures create uncertainty over who should be held responsible if investors suffer losses, whether it be brokers, AI developers, or the investors themselves.
The letter asks the SEC to respond by July 31 with details on the safeguards currently in place for AI trading agents, when such tools should be required to register with the agency, and whether the SEC has enough authority to regulate the technology or needs additional powers from Congress.
