Somewhere in your firm right now, an advisor is pasting text into an AI chatbot. Maybe it’s meeting notes. Maybe it’s a draft client letter. Maybe (and this is the one that should keep you up at night) it’s a spreadsheet with account numbers in column C.
You can’t policy-memo your way out of this. Employees use AI because it works. The question for a CCO isn’t “should we allow AI?” It’s “can I demonstrate to an SEC examiner that AI use at my firm is governed, monitored, and documented?” If your firm runs on Microsoft 365, you already own, or can license into, most of the control infrastructure you need. This article walks through deploying a third-party AI (Claude, the one clients ask about most, though the same principles apply to any external LLM) inside the Microsoft ecosystem so it holds up under Reg S-P, Reg S-ID, Rule 206(4)-7, and Rule 204-2: Entra ID as the front door, Purview watching the data, Defender killing shadow AI, Sentinel keeping the record, and the six exam-file artifacts that prove all of it.
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