CFTC Commissioner Proposes New AI Regulation Measures for U.S. Financial Markets
Summary:
CFTC Commissioner Kristin Johnson has proposed measures for regulating AI in financial markets, including a risk-assessment framework, a task force for harmonizing regulation, and heightened penalties for intentional misuse of AI. This follows the appointment of the CFTC’s first Chief AI Officer, Ted Kaouk. She could potentially play a larger role in the U.S. financial market, if nominated for the position of Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury, as suggested by Congresswoman Maxine Waters.
Kristin Johnson, a Commissioner at the United States Commodity Futures Trading Commission (CFTC), has recently proposed three measures for regulating artificial intelligence (AI) technologies within U.S. financial markets. These proposals were presented at the Technology Advisory Committee (TAC) meeting on May 2. Johnson's proposals include creating a set of guidelines to gauge the risks of incorporating AI into financial markets, introducing steeper penalties for deliberate misuse of AI, and forming a task force to review and synchronize regulation and supervision associated with increasing integration of AI in financial markets.
While calls from government for risk evaluation and task forces are not uncommon, Johnson's suggestion for more severe penalties for AI related crimes could lead to significant changes in the current legal framework. She quoted a statement from U.S. Deputy Attorney General Lisa Monaco, drawing parallels between the level of danger exacerbated by firearms and AI in the context of crime.
Johnson pointed out that the CFTC should implement harsher penalties for individuals exploiting AI technologies to conduct fraud, market manipulation, or evasion of regulations. Individuals intentionally using AI to breach regulations must be warned and discouraged from further disrupting market functionality or integrity.
The commissioner's remarks follow the CFTC's appointment of their first Chief AI Officer, Ted Kaouk. In his previous role within the CFTC, Kaouk served as the Chief Data Officer and the Director of the Division of Data.
In related news, a letter was sent to U.S. President Joseph Biden by Congresswoman Maxine Waters, the leading member of the Financial Services Committee. In this letter, Waters recommended that Johnson be nominated as Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury. If Johnson is nominated and accepted, she will significantly contribute to formulating legislation and policy related to the U.S. financial market.
Published At
5/3/2024 7:38:56 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.