MFA has submitted a comment letter to the Commodity Futures Trading Commission (CFTC), making recommendations on how the commission should approach the use of artificial intelligence tools in derivatives markets.

MFA's letter is in response to the CFTC staff’s request for industry input on the use of AI in regulated markets.

MFA says its AI recommendations are designed to protect markets and investors while not stifling innovation, competition or the ability of alternative asset managers to generate returns for their investors, including pensions, foundations and endowments. They also align with the CFTC’s traditional principles-based approach to financial regulation.

MFA recommends that when addressing any potential issues with the use of AI in derivatives markets the CFTC should: use existing regulations to address potential concerns posed by the use of AI tools; remain technology-neutral and prioritise regulating market activities, not tools; and acknowledge that AI advancements have benefited markets, investors and managers and are still developing and could unlock important benefits.

Ina statement, Bryan Corbett, MFA's President & CEO, said: “AI tools used by alternative asset managers enhance competition, reduce costs, and improve market efficiency. MFA’s AI recommendations will ensure the CFTC can address concerns it might have about the use of the technology without harming innovation, markets, or investors.”

MFA’s comment letter also notes that the CFTC’s existing regulatory framework is well-designed to address the current and potential uses of AI tools.