It is my pleasure to welcome you to the Market Risk Advisory Committee’s (MRAC) Future of Finance (FoF) Subcommittee meeting. [2] Markets have witnessed increased adoption of AI including AI-driven investment advising, trade execution, risk management, and market surveillance. Designated Clearing Organizations must establish a Risk Management Committee “comprised of clearing members and customers of clearing members on matters that could materially affect the risk profile of the DCO” and Risk Management Working Groups composed of market participants. Many AI models are “black-box” models, meaning that it may be difficult and in some cases impossible, to explain their decision-making processes. In consultation with members of this working group of the Market Risk Advisory committee, I look forward to exploring a principles-based regulatory framework that underscores intelligibility, risk management, compliance, oversight, market responsibility, notice, and explainability.

Source: Forbes March 15, 2024 20:05 UTC