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FIA Warns Against Uniform Approach to System Safeguards

The Futures Industry Association (FIA) has sent a letter to the Commodities and Futures Trading Commission (CFTC) expressing concern over the prescriptive nature of the risk control measures being introduced to the market by the Commission. The letter is a response to the CFTC’s Concept Release on Risk Control and System Safeguards for Automated Trading Environments published in September (Squawkbox, September 12). The Concept Release discussed a series of pre-risk controls, post-trade reports, system safeguards related to the design, testing and supervision of automated trading systems and additional protections designed to promote safe and orderly markets The letter, signed by FIA president and CEO Walter Lukken, stresses that any risk controls implemented should be “appropriate to the role of the participant” and that the CFTC should try “to avoid introducing unnecessary complexity”. “Any risk control that is overly prescriptive may fail to take into account the unique char...

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