By Elena Eyber, J.D.
CFTC Commissioner Kristin N. Johnson delivered keynote remarks at the NYU AI Convening, highlighting the importance of addressing the integration of AI in financial markets. Johnson discussed the adoption of a working plan by the Market Risk Advisory Committee (MRAC) aimed at enhancing the CFTC's oversight of AI integration. The plan includes initiatives such as conducting a survey on AI use in CFTC-regulated markets and providing recommendations for new guidance or rulemaking. Johnson advocated for responsible AI use in financial markets, proposing interventions such as greater transparency, a principles-based regulatory framework, heightened penalties for fraudulent AI use, and the creation of an inter-agency task force focused on AI regulation.
MRAC’s AI working plan. The MRAC's working plan includes initiatives such as conducting a survey on the use of AI in CFTC-regulated markets and providing recommendations for new guidance or rulemaking. Johnson underscored the importance of refining these initiatives and emphasized the need for responsible AI integration in financial markets due to potential risks related to market integrity, customer protection, data privacy, bias, and cybersecurity.
Proposed interventions. Johnson proposed several interventions to promote responsible AI use, including greater transparency and visibility regarding AI adoption among registrants, the development of a principles-based regulatory framework, and the consideration of heightened penalties for fraudulent or manipulative AI use. Additionally, Johnson advocated for the creation of an inter-agency task force focused on information sharing and composed of various market and prudential regulators. This task force would support the AI Safety Institute in developing guidelines, tools, and best practices for regulating AI in the financial services industry.