FOOTNOTE 4 Many of these concepts are in harmony with evolving views of groups responsible for setting standards and developing regulations for other markets around the world. See, e.g.,
See also ESMA, "Final Report: Guidelines on Systems and Controls in an Automated Trading Environment for Trading Platforms, Investment Firms and Competent Authorities" (
The Commission seeks extensive public comment regarding each risk control contemplated herein. Commenters should address the effectiveness of each measure, and the degree to which it may already be in use by industry participants. Each commenter should identify the specific risk controls that it already employs. For all measures discussed in this Concept Release, commenters should also address whether there is a need for regulatory action to provide more uniform risk mitigation across CFTC-regulated derivatives markets. /5/ Comments that address this question with respect to each proposed risk control and system safeguard individually would be particularly helpful. In all cases, commenters should discuss, and quantify wherever possible, the costs and benefits of the pre-trade risk controls, post-trade reports and other post-trade measures, system safeguards, and other protections discussed in this Concept Release.
FOOTNOTE 5 In this regard, the Commission emphasized in the preamble to its final rules for part 38 that the efficacy of risk controls depends in part on the proper functioning of electronic systems, and that "the Commission may address electronic system testing, controls, and supervision-related issues in a subsequent proceeding."
Similarly, the system safeguards contemplated herein for ATSs are an outgrowth of the basic requirement in
The Concept Release recognizes that orders and trades in automated environments pass through multiple stages in their lifecycle from order generation, to execution, to clearing and allocation in proprietary or customer accounts, and steps in between. Accordingly, the Commission requests comment regarding the appropriate stage at which risk controls should be placed. Potential options include risk controls applicable to: (i) ATSs at the time of order generation; (ii) clearing firms during the order transmission process; (iii) trading platforms prior to exposing orders to the market; (iv) Derivatives Clearing Organizations ("DCOs"); and (v) other risk control focal points, including, for example, third-party "hubs" through which orders or order information could flow to uniformly mitigate risks across one or more trading platforms. Similarly, the Commission requests public comment regarding the appropriate focal point for system safeguards and testing and supervision standards for ATSs.
Most Popular Stories
- Bipartisan Budget Deal Gets Key Support in House
- Bitcoin Clones Lurch Onto Financial Scene
- Clinton to Keynote Annual Simmons Leadership Conference
- Futures Fall, Holiday Spending and Unemployment Up
- Budget Deal Will Cut 220,000 Californians Out of Jobless Benefits
- Senate Not So Keen on Budget Deal
- Oil Nears $98 a Barrel
- PhD Project Grooms Business Profs
- Selena Gomez, Shakira Among Top Hispanic Searches
- GM to Stop Making Autos in Australia