FIA and FIA PTG today submitted comments supporting the Commodity Futures Trading Commission’s (CFTC) Electronic Trading Risk Principles rule proposal. FIA says the CFTC proposal “reflects a carefully reasoned principles-based approach that builds on the industry’s efforts over the years to mitigate the risks of electronic trading”.
In its statement, FIA strongly encourages the agency to prioritise the proposal in its rulemaking agenda. “Electronic trading has brought enormous benefits to markets and customers through greater efficiency and deeper liquidity,” says FIA president and CEO, Walt Lukken. “But like any new technology it also creates new risks. For that reason, FIA has worked for more than a decade to develop best practices for identifying those risks and protecting the markets from disruptions. This proposal represents the distillation of years of dialogue between industry and regulators into a thoughtfully designed principles-based approach for managing the risks in the technological revolution that continues to transform these markets.”
FIA’s letter notes that the proposal recognises the critical role of technology in moving futures markets forward and builds on the industry’s efforts to reduce the risks inherent with electronic trading. It also codifies into the law mandatory principles that will ensure all trading venues operate with objectively reasonable safeguards and ensures that a principles-based approach will protect markets while allowing risk controls to continue to develop and benefit from innovation.