As discussed in Chapters 6 through 9, computers and software programs can, or soon will be able to, independently do all of the foregoing activities. As such, the legal and regulatory system must be prepared for the prospect of digital intermediaries operating in the futures markets.

In writing this book, my overall objective was to provide an overview of the regulation of derivatives while exploring critical legal and regulatory issues associated with the ever-increasing use of algo bots and related AI systems in these markets. While discussion and analysis of HFT firms, virtual currencies, and algorithmic market manipulation might be more fashionable topics at the moment, basic information about the existing laws and regulations governing the markets for derivatives is necessary context for understanding the impact that technological changes are having on the markets for futures and other derivatives. That is why I included chapters covering topics that described the overall regulatory framework for derivatives.

This book is about how the technological advances in automation and artificial intelligence (AI) that have fundamentally changed the nature of the US markets for futures contracts and other derivatives are necessitating, in some areas, changes to the legal and regulatory framework for these markets. To arrive at policy solutions to address the ways that AI systems are altering the markets, this book examines how algorithmic robots – algo bots, for short – have largely taken over trading in the futures markets, analyzes how regulators have responded to these changes thus far, and explores what steps policy makers should take in the future. But before diving into any of those topics, allow me to put the societal impact of these advances in computer science technologies in a broader context, beyond finance and derivatives.