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 can be held accountable for any losses incurred by investors.
What is Agentic Trading?
Agentic trading allows investors to hand over control of their brokerage accounts to an AI agent, which makes trades on their behalf. The AI agent is trained on historical data and uses machine learning algorithms to make investment decisions.
Several major brokerages, including Robinhood, Public, and SoFi, have launched their own versions of agentic trading in recent months. The SEC inquiry is seen as a response to the rapid growth of this new type of trading.
Concerns About Agentic Trading
The lawmakers who requested the SEC inquiry have raised several concerns about agentic trading. One of the main concerns is how brokerages describe the AI agents and whether they can be held accountable for any losses incurred by investors.
Another concern is the potential for herding risk, where large numbers of AI agents are trained on similar data and make the same trades, amplifying volatility rather than smoothing it out.
The lawmakers have also asked the SEC to clarify when an AI agent or its developer would need to register as a broker or advisor, and whether current rules can even apply to this new type of trading.
What Does This Mean for Investors?
For investors who are already using or considering agentic trading, 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.
However, the SEC inquiry could lead to changes in the regulatory path for agentic trading. If the SEC doesn’t satisfy the committee, the lawmakers may pass their own legislation to regulate this type of trading.
Original reporting: KRDO (Colorado Springs metro) — read the source article.
