As reported by Bloomberg’s Silla Brush, the U.S. Commodity Futures Trading Commission (CFTC) is seeking comment on whether to require registration for automated trading firms, taking a first step in potential restrictions on high-speed and algorithmic derivatives trading.
CFTC members voted unanimously to issue a concept release requesting input on more than 100 questions, including whether to expand testing and supervision of high-speed trading strategies. Today’s release, a step prior to a formal proposal by the top U.S. derivatives regulator, also considers ways to limit the maximum number of trading orders a firm can place in a given amount of time.
“Traditional risk controls and system safeguards, many of which were developed according to human speed and floor-based trading, must be evaluated in light of new market realities,” CFTC Chairman Gary Gensler said in a statement.
“In general, those involved in financial markets seem to have blindly accepted that technology is almost always a good thing,” Bart Chilton, a Democratic CFTC commissioner, said in a statement. “But it doesn’t work well enough if we continue to see aberrations.”