On October 24, 2019, U.S. Commodity Futures Trading Commission (“CFTC”) Chairman Heath P. Tarbert announced that LabCFTC would become its own independent office within the agency, reporting directly to him. LabCFTC was established in 2017 within the Office of General Counsel to promote financial technology (“FinTech”) innovation and was designed to be a hub for the FinTech industry to engage with regulators. LabCFTC maintains these goals going forward, including conducting research to understand market impacts, industry trends and regulatory implications of these new technologies. LabCFTC also focuses on identifying opportunities and new solutions within the agency and the markets the CFTC oversees by leveraging such new technologies.
LabCFTC has published educational primers on various topics regarding blockchain and digital assets, including its most recent primer on Artificial Intelligence in Financial Markets. The AI primer is intended to educate market participants and the public on the uses, risks and responsibilities concerning application of AI in the financial markets, and the role the CFTC plays in engaging industry participants, promoting AI technologies and providing guidance on its regulatory implications.
Additionally, on the same day, the CFTC, along with the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation announced that they have joined the Global Financial Innovation Network (“GFIN”), a “global sandbox” formed by the U.K. Financial Conduct Authority in August 2018. GFIN aims to provide a platform for regulators to better engage with market participants and find more global solutions to the cross-border challenges FinTech presents. The four U.S. regulators join 46 other financial authorities, international organizations and central banks, representing Australia, Brazil, Canada, Hong Kong, Israel, Singapore, the United Arab Emirates and others. The U.S. regulators have joined the initiative with the goal to enhance knowledge-sharing on innovation and “advance financial and market integrity, consumer and investor protection, financial inclusion, competition and financial stability.”
Two US states, Arizona and New York, also announced last week that they have joined the GFIN.
Norton Rose Fulbright has a useful database of FinTech materials for those who are interested in learning more about the subject.