FOOTNOTE 100 See FIA Recommendations for Risk Controls, supra note 62, at 4 . END FOOTNOTE
74. Please describe existing practices in the industry concerning how and the extent to which ATSs use (1) market data; and (2) news and information providers, including social media, to inform trading decisions.
75. The Commission requests comment regarding any risk controls, including reasonability checks, currently being used by market participants operating ATSs to review market data and news and information providers, including social media. Please describe the risk control, including the purpose of the control, the extent of its use among derivatives market participants, and any other aspects of the risk control that you believe would be helpful for the Commission to understand.
In addition, the data analyzed by trading algorithms can include government economic reports (e.g., GDP, unemployment, and inflation data), as well as economic reports from non-governmental organizations such as universities, trade groups, and other sources. While government reports are released pursuant to a lock-up process that is intended to ensure that no entity receives them ahead of others, it has been reported that early access to some non-government economic reports is available for a fee. For example, according to recent reports, the
FOOTNOTE 101 See Brody Mullins,
76. The Commission requests public comment concerning the lock-up process for government economic reports, and any additional measures that might be taken to protect against inappropriate disclosure.
77. Please describe the extent to which potentially market-moving data from non-governmental economic reports can be obtained prior to its public release for a fee. Are there specific reports or types of reports for which early disclosure should not be permitted? What process should be used for identifying non-governmental economic reports whose early release should not be permitted? Should the data release process for such reports be similar to the data lock-up process implemented for the release of government economic data?
The system safeguards described above are also listed in Appendix C.
F. Other Protections
1. Registration of Firms Operating ATSs
Although the Commission can currently take several actions to seek information from firms, such as the issuance of subpoenas to investigate a firm's trading activities on a registered exchange or to compel a firm to provide books and records, some have suggested that a registration requirement for firms operating ATSs and not otherwise registered with the Commission would enhance the Commission's oversight capabilities. Additionally, a registration requirement may allow for wider implementation of some or all of the pre-trade controls and risk management tools discussed in this Concept Release and currently deployed in various degrees in the market today.
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