Today’s meeting is the 5th Meeting of the Technology Advisory Committee (“TAC”) and we have covered a variety of issues, including pre-trade functionality, the SEF Showcase and now high frequency trading. Despite its ubiquitous utilization in our markets, high frequency trading is not as well understood by the public and the relevant regulatory bodies as I believe it should be.
Today’s discussion will cover three different topics. The first panel will discuss the role high frequency trading plays in our markets. Working with our Chief Economist, I have selected 24 individuals to participate in the new Subcommittee on Automated and High Frequency Trading to discuss and advise the Commission on defining and overseeing high frequency traders in our markets.
The second panel will focus on the final recommendations of the Subcommittee on Data Standardization. As I have said before, data is the foundation to our markets. Our ability to capture market data in a universal electronic form is essential to automating our surveillance and oversight programs. I’d like to take a moment to thank each and every member of this subcommittee for dedicating their time to this important endeavor.
The third panel will explore the deployment of technology solutions in the swaps market with a specific focus on evaluating the costs, technological and scheduling challenges posed by fully integrating pre-trade credit checks by October 1, 2012, as a technological substitute for documentation. In particular, I am interested in understanding the agreed upon industry standard and the policy issues raised by such standard. As the Commission continues to develop rules for swap execution facilities (“SEFs”) and Designated Contract Markets (“DCMs”), as well as other pending rules, what issues do we need to resolve?