Nashville Standard

United States Senators Bill Hagerty (R-TN) and Ted Cruz (R-TX) have introduced the Protecting Innovation in Investment Act, a legislation aimed at safeguarding Americans' affordable access to financial markets. The legislation comes in response to a proposed rule by the U.S. Securities and Exchange Commission (SEC) that would deter the use of technology in investing, potentially hindering the accessibility and affordability of investment options for Americans.

The Senators' legislation seeks to prevent the SEC's rule from going into effect and protect innovation in investment. Senator Hagerty expressed concern that American consumers would bear the cost of the SEC's attempt to overregulate financial markets. He emphasized that the agency should focus on securely managing its own technology before trying to hinder innovative technologies at private firms.

Senator Cruz highlighted the importance of technology in allowing more Americans to access the stock market. He argued that the SEC's proposed rule would harm the very investors it claims to protect, particularly those saving for retirement. The Protecting Innovation in Investment Act aims to prevent the rule from being implemented and ensure that it never sees the light of day.

The SEC's proposed rule, although seemingly targeting cutting-edge technology, actually encompasses a broad range of technologies, from simple spreadsheets to artificial intelligence. If implemented, advisors and brokers would face significant burdens in evaluating, testing, and documenting the use of technology in trading and client interactions. This could impede the accessibility of investing tools, even down to routine decisions such as choosing colors for an app.

The Protecting Innovation in Investment Act would not only block the SEC from finalizing, implementing, or enforcing its rule but also prevent the adoption of any substantially similar rule. The goal is to protect Americans' ability to participate in the financial markets and build wealth by keeping barriers to entry low and cost-effective.

The full text of the Protecting Innovation in Investment Act can be found [here](link to full text).