CFTC Plans to Probe AI's Impact on Trading, Compliance and More

The U.S. Commodity Futures Trading Commission (CFTC) will investigate the use of AI by regulated entities in areas such as compliance, trading, risk management, cybersecurity, record-keeping, data processing, analytics, and customer interactions.

CFTC, which issued the inquiry through a request for comment (RFC), wants to be better informed and look into the impact of AI on surveillance, Anti-Money Laundering (AML), and regulatory reporting functions.

According to CFTC Chair Rostin Behnam, RFC will play an important role in supporting the commission's strategic identification of high-priority AI projects “..internally to optimize our data-driven approach to policy, surveillance, and enforcement.”

“The call for feedback involves ongoing discussions across different agency departments, including market oversight, data, and risk divisions,” said Commissioner Kristin Johnson. 

The RFC, issued by the CFTC's Divisions of Market Oversight, Clearing and Risk, Market Participants, and Data, along with the Office of Technology Innovation, solicits comments on the definition of AI and its applications, including trading, risk management, compliance, cybersecurity, recordkeeping, data processing, analytics, and customer interactions.

This update comes soon after the Biden administration decided to enforce a new regulation whereby developers of major AI systems have to disclose safety test results to the government. This move, slated for review by the White House AI Council, is in response to an executive order signed by President Joe Biden three months ago to manage the rapid growth of AI. 

The CFTC aims to use feedback to optimize supervisory oversight and evaluate the necessity for future regulatory actions. Interested parties can submit comments electronically until April 24, 2024, through the CFTC Comments online process.