# CFTC Staff Advisory 24-17 on AI: Staff Advisory on the Use of Artificial Intelligence in CFTC-Regulated Markets (CFTC Letter No. 24-17)

Source: https://www.bankingnewsai.com/ai-regulation/documents/cftc-staff-advisory-24-17
Last updated: Aug 26, 2026

On December 5, 2024 the CFTC's Divisions of Clearing and Risk, Data, Market Oversight, and Market Participants issued CFTC Letter No. 24-17, a staff advisory reminding registrants and registered entities that the Commodity Exchange Act and CFTC regulations apply to their use of AI. It creates no new obligations and is not a compliance checklist. It maps AI use cases to existing requirements — exchange core principles on surveillance and system safeguards, DCO Core Principles B, C, D, E and I, swap dealer margin under Regulation 23.152, CPO disclosure under Part 4, and FCM customer-fund segregation under Regulation 1.20 — and states that responsibility is retained when AI is procured from a third-party provider.

## At a glance

| Field | Value |
| --- | --- |
| Authority | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) |
| Type | Guidance |
| Status | In force |
| Published | Dec 5, 2024 |
| Effective | Dec 5, 2024 |
| Applies to | CFTC registered entities (DCMs, SEFs, DCOs, SDRs) and registrants (swap dealers, FCMs, CPOs, CTAs, IBs, RFEDs, MSPs, floor brokers and traders, and associated persons) |
| Official text | https://www.cftc.gov/PressRoom/PressReleases/9013-24 |

## Key points

- Defines AI per Executive Order 14110; applies to entities that design, develop, use, or evaluate AI 'directly or by a third-party service provider'
- DCMs/SEFs/SDRs: AI in order processing, market surveillance, and system safeguards must satisfy DCM Core Principles 2, 4, 9, 12 and 20, SEF Core Principles 2, 3, 4 and 14, and Regulation 49.24; controls required across all seven system-safeguard risk categories
- Registered entities must give staff advance notice of material planned changes to automated systems (Regulations 38.1051(f)(1), 37.1401(f)(1), 49.24(h)(1), 39.18(h))
- DCOs: Core Principles B, C, D, E and I continue to apply; Regulation 39.18(d)(2) makes a DCO responsible even when AI is outsourced
- Swap dealers using AI to calculate or collect initial margin under Regulation 23.152 must still confirm adequate system performance
- A CPO using generative AI to prepare disclosure documents or account statements remains fully subject to Part 4; FCMs using AI for segregated-funds accounting remain bound by Part 1 and Regulation 1.20
- Staff may raise AI in routine examinations and will keep evaluating the need for future regulation or guidance
- Chairman Behnam called it 'a measured first step'; Commissioner Johnson issued a concurring statement urging an AI Fraud Task Force and heightened penalties

## What changed for banks

For bank swap dealers, FCMs, and exchange/clearing members it converted AI from an open question into an examination topic: firms are expected to have assessed AI risks, updated policies, procedures, controls and systems, and reviewed AI adoption for CEA compliance as they would any material system change. The explicit third-party point means vendor AI (including cloud and generative tools) sits inside the firm's own compliance perimeter.

## Use cases it governs

- [Trading & capital markets](https://www.bankingnewsai.com/ai-regulation/by-use-case#trading-markets)
- [Model risk management](https://www.bankingnewsai.com/ai-regulation/by-use-case#model-risk)
- [Third-party & vendor AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#third-party-vendors)
- [Generative & agentic AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#generative-agentic-ai)
- [Cybersecurity](https://www.bankingnewsai.com/ai-regulation/by-use-case#cybersecurity)
- [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general)

## FAQ

### Does CFTC Letter 24-17 create new compliance requirements?

No. It states it is not a compliance checklist and does not create enforceable rights or new binding rules. It lists existing CEA and regulatory requirements that AI use may implicate and expects firms to update risk assessments, policies, and controls accordingly.

### Which CFTC rules apply to a swap dealer's AI margin model?

The advisory cites Regulation 23.152 on initial margin for uncleared swaps: a swap dealer that uses AI to assist margin collection must still confirm the system performs adequately so that risk is properly managed.

### Can a CPO use generative AI to draft disclosure documents?

Yes, but the advisory says the CPO remains subject to all Part 4 requirements for the accuracy and content of disclosure documents and periodic account statements, regardless of the tool used.

## Related documents

- [CFTC Compute Derivatives RFC](https://www.bankingnewsai.com/ai-regulation/documents/cftc-compute-derivatives-rfc-2026) — Request for Comment on the Listing of Compute Derivatives Contracts (Aug 19, 2026)
- [CFTC Innovation Task Force](https://www.bankingnewsai.com/ai-regulation/documents/cftc-innovation-task-force-2026) — Chairman Selig Announces Formation of New Innovation Task Force (Mar 24, 2026)
- [Johnson RegHub Summit Remarks (Jun 2025)](https://www.bankingnewsai.com/ai-regulation/documents/cftc-johnson-reghub-london-2025) — Keynote Remarks of Commissioner Kristin N. Johnson at RegHub Summit London 2025: Enabling AI Tools To Enhance Compliance and Surveillance (Jun 18, 2025)
- [Johnson Statement on AI in Derivatives Markets (Dec 2024)](https://www.bankingnewsai.com/ai-regulation/documents/cftc-johnson-statement-2024-12-05) — Statement of Commissioner Kristin N. Johnson on Future-Proofing Financial Markets: Assessing the Integration of Artificial Intelligence in Global Derivatives Markets (Dec 5, 2024)
- [CFTC TAC Responsible AI Report](https://www.bankingnewsai.com/ai-regulation/documents/cftc-tac-responsible-ai-report-2024) — Responsible Artificial Intelligence in Financial Markets: Opportunities, Risks & Recommendations (May 2, 2024)
- [CFTC AI Scams Customer Advisory](https://www.bankingnewsai.com/ai-regulation/documents/cftc-ai-scams-customer-advisory-2024) — Customer Advisory: AI Won't Turn Trading Bots into Money Machines (Jan 25, 2024)
- [CFTC AI Request for Comment (2024)](https://www.bankingnewsai.com/ai-regulation/documents/cftc-ai-request-for-comment-2024) — Request for Comment on the Use of Artificial Intelligence in CFTC-Regulated Markets (Jan 25, 2024)
- [Bailey: Frontier AI and the Question of Governance (Sep 2026)](https://www.bankingnewsai.com/ai-regulation/documents/boe-bailey-frontier-ai-governance-2026) — Frontier AI and the Question of Governance — Governor Andrew Bailey (Sep 30, 2026)

Last reviewed Aug 26, 2026. Cite the official text (https://www.cftc.gov/PressRoom/PressReleases/9013-24) for the rule and this page for the summary and dates.

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