FIA and FIA PTG comment in support of the CFTC’s electronic trading proposal

24 August 2020

Washington, DC – FIA and FIA PTG (collectively, “FIA”) today submitted comments supporting the CFTC’s Electronic Trading Risk Principles rule proposal. The CFTC proposal reflects a carefully reasoned principles-based approach that builds on the industry’s efforts over the years to mitigate the risks of electronic trading. As such, FIA strongly encourages the agency to prioritize the proposal in its rulemaking agenda.

“Electronic trading has brought enormous benefits to markets and customers through greater efficiency and deeper liquidity,” said FIA President and CEO Walt Lukken. “But like any new technology it also creates new risks. For that reason, FIA has worked for more than a decade to develop best practices for identifying those risks and protecting the markets from disruptions.  This proposal represents the distillation of years of dialogue between industry and regulators into a thoughtfully designed principles-based approach for managing the risks in the technological revolution that continues to transform these markets.”

FIA’s letter today notes that the proposal makes the following points:

  • Recognizes the critical role of technology in moving futures markets forward and builds on the industry’s efforts to reduce the risks inherent with electronic trading.
  • Codifies into the law mandatory principles that will ensure all trading venues operate with objectively reasonable safeguards.
  • Ensures that a principles-based approach will protect markets while allowing risk controls to continue to develop and benefit from innovation.

For more than a decade, FIA member firms have taken a leadership role in identifying risks and strengthening safeguards related to electronic trading in the futures markets globally. Since April 2010, FIA has published six papers proposing industry best practices and guidelines related to these important topics. In addition, FIA has submitted comprehensive responses to numerous CFTC discussions and rulemaking initiatives and participated in multiple CFTC-hosted meetings and industry roundtables. FIA commends the CFTC for its deliberate approach to this rulemaking and welcomes the opportunity to continue to work with the CFTC and market participants to promote safe, reliable and vibrant electronic markets.

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