Key Takeaways
- • MFA urged the CFTC to support the responsible development of compute derivatives, contracts tied to the price of computing power used to train and run AI models, in a comment letter submitted in response to the CFTC's request for comment.
- • MFA argued that differences in compute pricing by chip generation, provider, and region are common in commodity markets and should not alone prevent exchanges from listing contracts offering useful price signals and partial hedges.
- • MFA asked the CFTC to focus its review on three safeguards: reliable, auditable settlement benchmarks; protection against manipulation of benchmark inputs and settlement prices; and product-specific clearing, margin, position controls, and disclosures.
- • MFA CEO Bryan Corbett said derivatives can help companies manage uncertainty in the value of AI infrastructure investment, which is surging.
Summary
The Managed Funds Association (MFA) has urged the Commodity Futures Trading Commission (CFTC) to support the responsible development of compute derivatives, according to a comment letter the trade group submitted in Washington, D.C. The letter responds to the CFTC's request for comment on listing derivatives tied to the price of computing power used to train and run artificial intelligence (AI) models.
MFA CEO Bryan Corbett said compute derivatives will support the infrastructure buildout the U.S. needs to compete in the global AI race. He noted that investment in AI infrastructure is surging and that rapidly changing AI models make the future price and value of computing capacity harder to predict. Derivatives, he said, are designed to help companies manage that uncertainty and invest with more confidence.
MFA acknowledged that the underlying compute market is still taking shape, with prices varying by chip generation, provider, and region. The group argued these differences are common across commodity markets and should not, on their own, prevent exchanges from listing contracts that provide useful price signals and meaningful partial hedges. It further urged the CFTC to let competing contract designs develop and to allow cash and derivatives markets to mature together.
Rather than opposing listings, MFA recommended the CFTC concentrate its review on the safeguards that make these markets reliable. It urged the Commission to require exchanges to demonstrate that settlement benchmarks are representative, transparent, and auditable, with strong governance, conflicts-of-interest controls, and fallback procedures. It also called for exchanges to have access to the information needed to detect and deter manipulation of benchmark inputs or settlement prices. Finally, MFA urged that clearing, margin, position controls, and disclosures be tailored to each contract's design and risks, evolving as reliable data, liquidity, and participation develop.
MFA, which represents the global alternative asset management industry and has more than 180 fund manager members, framed the proposal in terms of institutional risk management, noting that pension plans, endowments, and foundations rely on alternative managers for diversification and risk management.
MFA CEO Bryan Corbett said compute derivatives will support the infrastructure buildout the U.S. needs to compete in the global AI race. He noted that investment in AI infrastructure is surging and that rapidly changing AI models make the future price and value of computing capacity harder to predict. Derivatives, he said, are designed to help companies manage that uncertainty and invest with more confidence.
MFA acknowledged that the underlying compute market is still taking shape, with prices varying by chip generation, provider, and region. The group argued these differences are common across commodity markets and should not, on their own, prevent exchanges from listing contracts that provide useful price signals and meaningful partial hedges. It further urged the CFTC to let competing contract designs develop and to allow cash and derivatives markets to mature together.
Rather than opposing listings, MFA recommended the CFTC concentrate its review on the safeguards that make these markets reliable. It urged the Commission to require exchanges to demonstrate that settlement benchmarks are representative, transparent, and auditable, with strong governance, conflicts-of-interest controls, and fallback procedures. It also called for exchanges to have access to the information needed to detect and deter manipulation of benchmark inputs or settlement prices. Finally, MFA urged that clearing, margin, position controls, and disclosures be tailored to each contract's design and risks, evolving as reliable data, liquidity, and participation develop.
MFA, which represents the global alternative asset management industry and has more than 180 fund manager members, framed the proposal in terms of institutional risk management, noting that pension plans, endowments, and foundations rely on alternative managers for diversification and risk management.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.