The Managed Funds Association (MFA) is urging the Commodity Futures Trading Commission (CFTC) to support the responsible development of compute derivatives.
MFA officials point out that prices for computing power vary by chip generation, provider, and region. These differences are common across commodity markets and should not, on their own, prevent exchanges from listing contracts that offer useful price signals and meaningful partial hedges. The CFTC, says MFA, should let competing contract designs develop and allow the cash and derivatives markets to mature together.
In a comment letter submitted this week, MFA recommended that the CFTC focus its review on the safeguards that make these markets reliable for participants. Specifically, MFA urged the CFTC to:
- Ensure reliable price benchmarks. Exchanges should demonstrate that settlement benchmarks are representative, transparent, and auditable, with strong governance, conflicts-of-interest controls, and fallback procedures.
- Prevent market manipulation. Exchanges should have access to the information needed to detect and deter attempts to manipulate benchmark inputs or settlement prices.
- Tailor safeguards to each product. Clearing, margin, position controls, and disclosures should reflect each contract’s design and risks and evolve as reliable data, liquidity, and participation develop.
“Compute derivatives will support the infrastructure buildout America needs to win the global AI race,” Bryan Corbett, MFA president and CEO, said. “Investment in AI infrastructure is surging, and AI models are changing fast. That makes the future price and value of computing capacity harder to predict. Derivatives are designed to help companies manage that uncertainty and invest with more confidence.”
MFA), based in Washington, D.C., New York City, Brussels, and London, represents the global alternative asset management industry.