FIA PTG to Closely Analyze CFTC Proposed Rule on Automated Trading
Commentary by Steven Lofchie
Futures Industry Association Principal Traders Group ("FIA PTG") Chair Rob Creamer stated that FIA PTG will carefully review the CFTC's proposed rules on automated trading and analyze their potential implications. He said that FIA PTG will pay "particularly close attention" to the issue of access to proprietary algorithms and the intellectual property concerns raised by Commissioner Christopher Giancarlo. In a statement released following the CFTC's open meeting held November 24th, Mr. Creamer said: "the Commissioners have emphasized a data-driven approach and have referenced standards that follow industry best-practices, including pre-trade risk controls. We’re hopeful that the rules issued today reflect those ideals."
Commentary
While the potential authority of the CFTC to take possession of firms' algorithms has drawn most of the early attention, the burden of the compliance obligations that would be imposed by this proposal, and the subsequent risks of liability, should not be underestimated.
