The Commodity Futures Trading Commission’s Divisions of Clearing and Risk, Data, Market Oversight, and Market Participants has recently issued a staff advisory on the use of artificial intelligence in CFTC-regulated markets by “registered entities and registrants.”
The advisory reminds CFTC-regulated entities of their obligations under the Commodity Exchange Act and the CFTC’s regulations “as these entities begin to implement AI.”
CFTC staff is closely tracking the development of AI technology and AI’s potential “benefits and risks.”
Staff values its ongoing dialogue with CFTC-regulated entities and intends to monitor these entities’ use of AI as “part of the agency’s routine oversight activities.”
The advisory is informed, in part, by public comments received in response to the staff’s January 25, 2024 Request for Comment on AI.
AI is expected to play an increasingly important role in the foreseeable future. Artificial intelligence has the potential to disrupt finance, insurance services, and many other industries that form a critical part of the global economy. Private corporations such as Microsoft, Google, Meta, and many others are competing to develop the most sophisticated AI models the world has ever seen.
However, many people are still unaware of the potential benefits as well as significant drawbacks of using AI. While many think AI can or will replace human jobs, the more serious implications of this technology could be its abuse to carry out illegal activities. Due to these concerns, it is imperative that regulators such as the CFTC continue to focus on how to responsibly leverage AI and other transformative technologies.
Regular communication, collaboration, and meaningful dialogue and policies between local and international organizations is vital if we’re to effectively integrate AI technologies into the existing global infrastructure.
With the rise of cryptocurrencies, high-performance Fintech platforms, and improved communication networks, it can be expected that AI will continue to play a dominant role in the global economy moving forward into 2025 and beyond.