How InferTrust™ creates verifiable records for AI-assisted trading and investment decisions, supporting SEC, FINRA, and fiduciary compliance requirements.
AI-assisted trading, robo-advisory, and algorithmic investment decisions are subject to SEC, FINRA, and state regulatory oversight. When AI influences investment recommendations, portfolio allocation, or trade execution, the firm has fiduciary obligations to demonstrate that these decisions were made in the client's best interest and in compliance with applicable regulations.
For each AI-assisted trading or investment decision, InferTrust™ Financial captures the model version and strategy parameters, the market data and risk factors evaluated, the resulting action (execute trade, rebalance portfolio, hold, or escalate to human advisor), and the compliance rules and suitability criteria active at the time. These records are cryptographically bound into a tamper-evident chain.
Regulation Best Interest (Reg BI) and fiduciary standards require firms to document that investment recommendations serve the client's best interest. InferTrust™'s decision records provide verifiable proof that the AI considered the client's profile, risk tolerance, and investment objectives when making each recommendation. This evidence supports the firm's compliance with suitability and best interest obligations.
When regulators investigate trading patterns or market manipulation concerns, they need to reconstruct the decision chain. InferTrust™'s records enable the firm to demonstrate exactly what the AI decided, what market conditions it evaluated, and what parameters governed the decision. This reconstruction capability supports compliance with SEC and FINRA surveillance and recordkeeping requirements.