A group of lawmakers has asked the SEC to investigate agentic trading, a type of AI-powered trading that has gained popularity in recent months. The inquiry is focused on how brokerages describe the AI agents and whether they are providing adequate investor protections.

What is Agentic Trading?

Agentic trading allows customers to hand over control of their brokerage accounts to an AI agent, which makes trades on their behalf. The AI agent is trained on predictive data analytics and can make trades independently.

The SEC inquiry is focused on the potential risks associated with agentic trading, including the potential for AI agents to converge on the same trades and amplify market volatility. The lawmakers are also concerned about the liability question, and whether AI developers can be held accountable for the trades made by their agents.

What Does This Mean for Investors?

For everyday investors, the practical guardrails haven’t changed. It’s still important to fund a dedicated account with money you can afford to lose, set spending and symbol limits where a platform offers them, and treat an agent as something to supervise rather than hand off entirely.

The SEC inquiry may lead to new regulations or guidelines for agentic trading, which could provide additional protections for investors. However, it’s still important for investors to do their own research and understand the risks associated with agentic trading before using these tools.

Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.