I am pleased to call the 11th TAC meeting to order since we reconstituted it in
I would like to acknowledge that our new Acting Chairman
Enhancing the Commission's swaps reporting rules will improve data quality, minimize confusion regarding reporting workflows, and increase standardization.
In addition, the Commission staff will continue to work on the data standardization effort, led by the
Today's TAC agenda is packed with three very important and timely topics that are also at the top of the Commission's policy agenda.
Panel I -- Data: Where Does the Commission Stand and How Do We Fix What's Broken?
First, we will hear from a collection of the Commission's division directors who have critical market oversight responsibilities, as well as our
In thinking about our goals, I reviewed the
The report also establishes several high level objectives for data utilization that the Commission should be able to achieve. These objectives include:
1. Assessing systemic risk and financial stability
2. Conducting market surveillance and enforcement
3. Supervising market participants
4. Conducting resolution activities
5. Bringing greater transparency to OTC markets
While it is clear we have achieved objective 5 with a partially complete swaps data report and a real-time swaps data ticker, I believe we have a long way to go on the other fundamental data objectives.
Working hand-in-hand with the division directors, I want to better understand how we will tackle these key objectives, and further learn about the data priorities of each division and the progress being made to achieve these priorities.
Panel II -- Concept Release on Automated Trading
Our second panel will focus on a question that TAC has extensively discussed over the past three and a half years: What is the appropriate level of pre-trade functionality deployed by traders, futures commission merchants, and exchanges to protect market integrity against rouge trades which can cause market disruption?
The first TAC meeting4 addressed this topic and by the third TAC meeting,5 there were recommendations for minimum standards.6 Subsequently, we established a Subcommittee on Automated and High Frequency Trading to define high frequency trading and explore other policy questions related to automated trading.7
Today, we will discuss the Concept Release on Risk Controls and Systems Safeguards for Automated Trading Environments.8 The comment period closed on
I recognize that there are very strong opinions regarding automated trading and I believe that we will have a robust discussion.
Panel III - Made Available-to-Trade Determination
Finally, the third panel will address swap execution facilities (SEFs) and the recent Made Available-to-Trade (MAT) determinations.
As part of our research and analysis, we are focusing panel III's discussion on package transactions and the Commission staff will hold a roundtable on
While I am pleased that the Commission staff is working to provide relief from the mandatory trading requirement for package transactions, I did raise serious concerns with the MAT process in my
DMO's memo to the
The only insight provided in the staff memo regarding commenters' requests for temporary relief for package transactions was the following statement: "[S]uch requests are not appropriate for consideration within the scope of the Commission's process for reviewing a MAT determination." (emphasis added).
Thankfully, the memo went on to say, "[t]herefore, the Division is taking these comments into consideration and may provide a future response or guidance as appropriate." However, that was the extent of the discussion.
While I am frustrated that we are conducting the analysis on package transactions after making the MAT determinations, I am pleased that this TAC meeting will initiate the process for identifying and resolving the issues associated with such transactions.
I would like to see the market continue to benefit from the efficiency of package transactions and encourage the trading of such products on exchange. So, let's begin the process to figure out how to make that happen.
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