U.S. financial regulator Commodity Futures Trading Commission (CFTC) has announced the creation of LabCFTC – a new initiative aimed at promoting responsible FinTech innovation to improve the quality, resiliency, and competitiveness of the markets the CFTC oversees.
Located in New York, LabCFTC will also look to accelerate CFTC engagement with FinTech and RegTech solutions that may enable the CFTC to carry out its mission responsibilities more effectively and efficiently. Today’s initiative was approved by a unanimous vote of the Commission.
LabCFTC is the agency’s focal point to promote FinTech innovation and fair competition by making the CFTC more accessible to FinTech innovators and serving as a platform to inform the CFTC’s understanding of new technologies. Further, LabCFTC will be an information source for the Commissioners and the CFTC staff on responsible innovation that may influence policy development.
“Simply put, LabCFTC is intended to help us bridge the gap from where we are today to where we need to be: 21st century regulation for today’s digital markets,” said CFTC Acting Chairman J. Christopher Giancarlo. “The purpose of LabCFTC is twofold: The first is to provide greater regulatory certainly that encourages market-enhancing FinTech innovation to improve the quality, resiliency, and competitiveness of our markets. The second is to identify and utilize emerging technologies that can enable the CFTC to carry out its mission more effectively and efficiently in the new digital world.”
Consumers, farmers, ranchers as well as investors have benefited from the technological innovation of the markets overseen by the CFTC. The pace of change in just the past few years has only increased. Today, FinTech is driving innovation in financial markets across the globe. New technologies are wide-ranging in scope, from cloud computing and algorithmic trading to distributed ledgers to artificial intelligence and machine learning to network cartography, and many others. These technologies have the potential for significant or even transformational impact on CFTC regulated markets and the agency itself.
Core LabCFTC Components:
- GuidePoint: Available today, GuidePoint is a dedicated point of contact for FinTech innovators to engage with the CFTC, learn about the CFTC’s regulatory framework, and obtain feedback and information on the implementation of innovative technology ideas for the market. Such feedback may include information that, particularly at an early stage, could help innovators/entities save time and money by helping them understand relevant regulations and the CFTC’s oversight approach.
- CFTC 2.0: An initiative to foster and help initiate the adoption of new technology within the CFTC’s own mission activities through collaboration with FinTech industry and CFTC market participants.
To accomplish the agency’s goals, LabCFTC will facilitate:
- Through proactive engagement with the innovator community, a better understanding in the CFTC of how new innovations interact with the regulatory and supervisory framework, and identification of areas where the framework could better support responsible innovation.
- Collaboration among the FinTech industry and CFTC market participants that facilitate responsible innovation in our markets and promote the use of technology within our agency. This collaboration will benefit many businesses and members of the public that rely on the derivatives markets the CFTC oversees.
- CFTC participation in studies and research that facilitate responsible innovation in the markets and promote the use of technology within the agency.
- Cooperation with financial regulators at home and overseas.
- Monitoring of trends and developments to ensure that CFTC’s regulatory framework supports – and does not unduly impede – responsible technological innovation.
- Information sharing about applications of FinTech, including potential use cases, benefits, risks, and solutions.
- Engagement with academia, students and professionals on applications of FinTech relevant in the CFTC space.