The regulator wants a better view into the risks and rewards of A.I.
The Commodity Futures Trading Commission (CFTC) wants input from derivatives industry participants about the ways artificial intelligence (A.I.) might impact them.
The regulator’s Divisions of Market Oversight, Clearing and Risk, Market Participants, and Data and the Office of Technology Innovation sent out a request for comment (RFC) “to better inform them on the current and potential uses and risks of artificial intelligence (A.I.) in the derivatives markets the CFTC regulates,” officials say.
“The RFC … allows us to better align our supervisory oversight and evaluate the need for future regulation, guidance, or other Commission action,” says CFTC Chairman Rostin Behnam, in a prepared statement. “This RFC will further support the CFTC as we strategically identify the highest priorities and return-on-investment projects with A.I. use cases internally to optimize our data-driven approach to policy, surveillance, and enforcement.”
In addition, the RFC “seeks comment on the definition of A.I. and its applications, including its use in trading, risk management, compliance, cybersecurity, recordkeeping, data processing and analytics, and customer interactions,” according to the CFTC.
The regulator also wants comments on A.I.’s risks, “including risks related to market manipulation and fraud, governance, explainability, data quality, concentration, bias, privacy and confidentiality and customer protection,” officials say. “Staff will consider the responses to this request in analyzing possible future actions by the CFTC, such as new or amended guidance, interpretations, policy statements, or regulations.”
CFTC officials will accept comments until April 24, 2024, which can be submitted electronically through the CFTC Comments online process.
Need a Reprint?
