Category: Reg AT
Following the high-profile market disruptions caused by the “flash crash” of May 6, 2010, and the “Knightmare” in August 2012, when a coding error in Knight Capital’s trading software resulted in the firm suffering $460 million in losses over the course of 45 minutes, the CFTC sought to determine existing industry practices around automated trading in the futures markets and to evaluate the need for additional regulations. To this end, in 2013, the CFTC published an extensive Concept Release and sought industry feedback on over 120 questions regarding risk controls and system safeguards around automated trading. Market participants applauded the CFTC’s efforts to foster an open discussion on industry best practices, and the industry devoted significant time and resources to drafting thoughtful responses to the Commission’s questions, with over 50 response letters filed.
The future is now.
On June 29, 2017, the U.S. Senate Committee on Agriculture, Nutrition, and Forestry voted overwhelmingly to confirm the nomination of J. Christopher Giancarlo as Chairman of the U.S. Commodity Futures Trading Commission (“CFTC”), paving the way for his nomination to move forward to consideration on the floor of the U.S. Senate. Within two hours of this announcement, the CFTC announced its first non-prosecution agreements. These agreements and the related “spoofing” cases are discussed in more detail below. These same-day announcements reflect the advancing ambitious agenda outlined by Acting Chairman Giancarlo in his speech entitled “CFTC: A New Direction Forward,” given on March 15, 2017. Acting Chairman Giancarlo has since taken every opportunity to advise the industry of his goals to reduce regulatory burdens, modernize the agency, and maintain the CFTC’s aggressive enforcement efforts. All the while, the … Read More »