In 2021, the SEC requested information on the use of certain digital engagement practices (DEPs) and technology in response to the so-called “meme stock” trading in January 2021, asking about, among other things, conflicts of interest. Later that year, the SEC released a staff report on certain January 2021 trading activity, which identified DEPs as an area for additional study and consideration. Almost two years later, we can see the result of those efforts: proposed new rules (Proposal) to address risks to investors from conflicts of interest associated with the use of predictive data analytics (PDA) by investment advisers and broker-dealers (collectively, firms). The Proposal, which was published in the Federal Register on August 9, 2023, reflects what would be a significant shift in the SEC’s approach to conflicts of interest – disclosure of firms’ conflicts associated with their use of PDA, artificial intelligence and similar technologies to interact with investors would not be sufficient. Instead, firms would be required to eliminate or neutralize the effects of such conflicts. The deadline for comments on the Proposal is October 10, 2023. This second article in a two-part series discusses questions raised by the Proposal and its implications for hedge fund managers. The first article explained the events that lead to the Proposal and provided an overview of its key elements. See “Understanding and Mitigating Risks Associated With Trading Driven by Social Media” (Jun. 17, 2021); and “Can Reddit's Influence Be Regulated? SEC Commissioner Discusses Recent Market Volatility” (Mar. 18, 2021).