AI Securities Disclosure
SEC requirements for public companies to disclose material AI risks and practices.
Definition
AI Securities Disclosure refers to obligations of public companies to disclose material information about AI to investors. The SEC has increased focus on AI disclosure:
- Risk factors: Material AI-related risks in 10-K/10-Q filings
- MD&A: Discussion of AI's impact on business, operations, and financial condition
- AI washing: SEC scrutiny of misleading AI capability claims
- Cybersecurity rules: AI-related cyber risks under new cybersecurity disclosure rules
SEC Chair Gensler has warned about "AI washing"—companies making exaggerated AI claims to boost stock prices. Enforcement actions have targeted misleading AI disclosures. Companies should ensure AI disclosures are accurate and material AI risks are identified.
Sources
- •SEC Regulation S-K
- •10-K Filing Requirements
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