FIA PTG Blog : In our last piece on the CFTC’s proposed rules on automated trading , we explained why the Commission should focus only on risk controls in its first rulemaking on this topic. However, while we strongly urge the CFTC to set aside the policies and procedures section for now, we’re also enumerating the problems that would arise should they choose to move forward with it, particularly with their proposal for unprecedented access to algorithmic source code.
FIA PTG Blog: Risk controls are the most important aspect of market protection in automated trading. We have long advocated for risk controls for all electronic trading activity. These controls can be developed and implemented by individual market participants, or provided by third parties – including exchanges and clearing firms. The key is not who applies the risk controls, but rather that all activity is covered by risk controls, so that there are consistent safeguards in place to prevent market disruptions, no matter where they arise.
FIA PTG Blog: We encourage regulators to ensure that automated trading standards not only establish effective risk control but also continue to allow for the innovation that is driving efficiencies and productivity in our markets.
FIA PTG Blog: For the past year, FIA PTG members have been working alongside representatives from FIA and FIA EPTA on a comprehensive and detailed review of automated trading systems and operations. We shared our expertise on automated trading and worked hand-in-hand with brokers and exchanges to cover a wide range of topics that organizations—both large and small—should be thinking about.
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