b'GenAI Use and Retail Trading AppsSquaring TechnologicalInnovation with RobustRegulatory FrameworksRegulation and innovation may seem unlikelyclose coordination with colleagues on matters bedfellows. Regulation may seem a hindrancerelating to IP, data privacy and cybersecurity, to proponents of new technologies. And, letsas well as contracting for AI technology.face it, as a group, regulatory lawyers mayTechnology and regulation intersect in not be known for embracing novel approaches.our advice to broker-dealer clients in an array However, wed like to think we stand apart. Asof matters involving their digital platforms a financial institutions firm, were steeped inandtheirdigitalcustomerengagement. the regulatory frameworks applicable to ourWe work with a number of broker-dealers that clients, whether banks, broker-dealers, invest- operate mobile trading applications, within ment advisers, swap dealers, or other regulatedthe U.S. and cross-border. We advise on dig-entities. With our tech transactions, cyber, IPital bank networking arrangements, which and other colleagues, we advise broker-dealerare novel; arrangements with robo-advisers, clients on their use of generative Artificialinsurance agencies, and custodians; the devel-Intelligence (AI) in their businesses and oper- opment and launch of new digital services and ations. This includes advising on GenAI usethe expansion into non-securities products; infront-officeandback-officefunctions.and the internal use and external offering of For example, we advise on use of GenAI indata analytics. We have advised domestic and connection with preparing and distribut- foreign broker-dealers on the development, ing research reports, client interactions,launch and expansion of mobile app-based internal communications, and outsourcingretail brokerage platforms. We also regu-arrangements. This might include technol- larly advise on the launch of novel products ogy that assists in reviewing and summarizingand services on digital platforms, includ-data, consolidating, repackaging or modify- ing the integration of digital asset offerings ing firm-prepared reports, the distribution ofand related custody issues. Complex prod-research and the collection of user data, theucts are subject to heightened scrutiny by the enhancement of client as well as internal salesSEC, FINRA and state securities regulators, force interactions, and other technologies.in particular when offered to retail investors Some of this involves firms with cross-borderin self-directed accounts on digital platforms. operations and requires that we consider, withAssisting with product development, distri-our colleagues across offices, the applicationbution, and client engagement through digi-of non-U.S. rules and regulations. These mat- tal platforms requires a deep understanding of ters require thorough knowledge of SEC andbroker-dealer regulation, industry and regu-FINRA rules, guidance and expectations aslatory developments, and constantly evolving well as industry best practices with respect toregulatory expectations, but, importantly, also research reports and research analysts, clientlistening acutely to the clients objectives for disclosures, communications with the public,their products and services, near-term and supervision and recordkeeping. In addition, anlong-term. We like to think were well-in-understanding of evolving regulatory expec- formed listeners who embrace technology. tations relating to broker-dealers use of AI technology in their business and operations is absolutely essential. Of course, it also requires13'