AI Governance for FinTech & Autonomous Trading
When autonomous AI models execute real trades and move capital via the Model Context Protocol (MCP), broker-dealers face severe supervisory liability under FINRA Rule 3110 and SEC Rule 15c3-5. Fraoula delivers real-time pre-trade risk controls and deterministic audit rails.
Interactive Pre-Trade Risk & Kill-Switch Simulator
Simulate agentic order volume, capital allocation, and SEC 15c3-5 market access latency bounds in real time.
Pre-trade credit checks and kill switch latencies operating well within regulatory tolerances. No runaway loop risk detected.
The 4 Pillars of Fraoula FinTech AI Governance
Modern brokerages cannot rely on terms-of-service disclaimers when connecting retail models to market execution. Fraoula enforces deterministic programmatic control.
Model Context Protocol (MCP) Tool Execution Sandboxing
Ring-fence external language models (Claude, ChatGPT, Cursor, Grok) inside dedicated sub-accounts. Fraoula acts as an inline RPC proxy, enforcing hard spending caps, symbol whitelists, and order rate limits before tool calls reach the matching engine.
real-time SEC 15c3-5 Pre-Trade Risk Filtering
In-memory volatile RAM validation of every inbound agentic order. Algorithmic orders are checked against account equity, market impact models, and erroneous order thresholds in under 350 microseconds, preventing flash-crash cascading loops.
FINRA Rule 3110 Algorithmic Supervisory Logging
Immutable cryptographic ledger recording prompt inputs, tool-call arguments, model version hashes, and execution telemetry. Reconstruct the exact reasoning state of any autonomous agent during regulatory audits or flash volatility events.
Autonomous Kill-Switch & Feedback Loop Containment
Automated circuit breakers that detect correlated behavior across multi-agent clusters. If agentic order cancel-to-fill ratios spike or market spread anomalies occur, Fraoula immediately severs the MCP socket and transitions portfolios to defensive hold.
Global Regulatory Standards Enforced by Fraoula
Broker-dealers remain strictly liable for the market impact of connected third-party models. Fraoula satisfies the rigorous supervisory demands of global capital market regulators.
| Regulatory Standard | Enforcement Agency | Statutory Requirement | Fraoula Enforced Protection |
|---|---|---|---|
| SEC Rule 15c3-5 (Market Access) | SEC / FINRA | Mandatory pre-trade risk controls preventing erroneous orders | Real-time in-memory capital & price band filters |
| FINRA Rule 3110 (Supervision) | FINRA | Supervisory system to oversee algorithmic trading activity | Deterministic model telemetry & prompt-to-fill audit logging |
| Federal Reserve SR 11-7 | Federal Reserve / OCC | Supervisory guidance on continuous model risk management | Empirical drift monitoring & stress-test perturbation suites |
| MiFID II RTS 6 | ESMA (European Union) | Pre-trade controls, kill functionality, and annual algorithmic self-assessment | Automated kill switches & algorithmic risk certification dossiers |
| CFTC Reg AT | CFTC | Pre-trade risk controls and source code audit readiness for automated trading | Versioned immutable model execution telemetry logs |
Deploy Legally Compliant Agentic Trading Infrastructure
Do not let third-party model hallucinations trigger regulatory enforcement actions or catastrophic flash losses. Protect your brokerage and capital with Fraoula Data Auditor.