A Commodity Futures Trading Commission Technology Advisory Committee (TAC) has released a report aiming to illuminate the effects and consequences of AI advancements on financial markets.

“Given the collective decades of AI experience of Committee members, their findings regarding the need for responsible AI practices, as well as the importance of the role of humans, governance, data quality, data privacy, and risk-management frameworks targeting AI-specific risks, should be taken seriously by the financial services industry and regulators,” Commissioner Goldsmith Romero said.

In the report the committee suggested five recommendations on how the CFTC should address this AI evolution to ensure the protection of financial markets.

Furthermore, the Committee encourages the CFTC to utilize its position as a market regulator to bolster ongoing AI initiatives originating from both the White House and Congress.

The CFTC proposes several measures to enhance understanding and regulation of AI in finance. These include hosting public discussions and engaging with registered entities to assess prevalent AI technologies.

They aim to adopt an AI Risk Management Framework aligned with NIST guidelines, analyze existing regulations, align policies with federal agencies, and bolster staff expertise through budget supplements.

“ These expert recommendations are geared towards more responsible AI systems with greater transparency and oversight to safeguard financial markets.  I am tremendously grateful for the subcommittee who drafted this report.  I hope that this report will drive future work by the CFTC and other financial regulators as we navigate this evolving technology together,” Romero added.