FIA and the FIA Principal Traders Group sent a letter to the Commodity Futures Trading Commission yesterday, urging the CFTC to leverage existing resources as it works to develop a 21st-century surveillance system.
“We appreciate the CFTC’s efforts to keep pace with evolving markets,” said Walt Lukken, President and CEO of FIA. “The Commission already collects a range of valuable data points, and it has access to even more surveillance data through the exchanges. Rather than creating redundant systems, we believe the CFTC would more effectively enhance its surveillance efforts by increasing its analytical capacity and using existing data to test for cross-exchange abuses.”
FIA and FIA PTG detailed five core requirements for surveillance modernization, including:
- Continuing the successful practice of delegating “front-line surveillance” to exchanges
- Increasing the quantitative and analytical expertise of CFTC staff so as to better understand increasingly complex data
- Surveying cross-market activities using existing large trader and daily transaction reports
- Avoiding the duplication of existing systems built or commissioned by exchanges
- Maintaining data privacy and security