In a letter filed today with the Federal Trade Commission, the FIA Principal Traders Group responded to the proposed Non-Compete Clause Rulemaking which would effectively prohibit the use of non-compete clauses. FIA PTG cautioned that proprietary software, and the innovative source code that runs it, is key to many FIA PTG members’ success as liquidity providers. Accordingly, this Proposal if implemented as proposed would limit their ability to protect their intellectual property from disclosure to competitors and potentially jeopardize the liquidity they are able to provide.
Given the negative impact the Proposal would have on the U.S. financial markets, FIA PTG encouraged the Commission to abandon the Proposal in its entirety. They added that if the Commission opts to move forward with the Proposal in some form, FIA PTG strongly encourages the Commission to add an exemption for paid noncompetes provided to highly compensated employees. Finally, if a Final Rule is published, FIA PTG requested the Commission provide 365 days to comply given the expansive application of the Rule and the complex and lengthy steps necessarily involved in compliance.