June 20, 2012
I’d like to thank Commissioner O’Malia for his leadership in convening this Technology Advisory Committee (TAC). I look forward to the presentations of the four working groups of the Subcommittee on Automated and High Frequency Trading.
I also want to thank all the working group members for their willingness to share their knowledge with the Commission and the public on these critical issues.
Though my schedule does not allow me to be here throughout the meeting, I look forward to hearing your thoughts on high frequency trading and automated trading systems.
The Commission is continuing to adapt our oversight to changing market structure, including emerging trends related to electronic trading.
Regulators cannot assume that the algorithms in the markets are well designed, tested or supervised. To give hedgers and investors confidence in markets, our regulations have to adapt to markets that are increasingly moving from man to machine.
The Commission has already taken a number of steps, and the TAC has been helping to inform us as we move forward. As it relates to both trading and clearing, the Commission has adopted rules for pre-trade filters to protect the markets and the clearing system. This was achieved in the final rules for designated contract markets and risk management for clearing members.
Further, the Commission has before it a draft concept release on potential risk controls and system safeguards for electronic trading platforms, automated trading systems, clearing firms and other market participants in the evolving market for U.S. derivatives trading.
The concept release would offer the broader public an opportunity to give the Commission advice on technology-driven changes in Commission regulated markets. The draft release covers potential risk controls and system safeguards to help ensure the safety and soundness of markets.
The Commission also is reviewing a rule on the reporting of ownership and control information for trading accounts. These rules would enhance the Commission’s surveillance capabilities and increase the transparency of trading to the Commission.
Again, I’d like to thank Commissioner O’Malia for his work, as well as our Chief Economist Andrei Kirilenko for all of his contributions to these efforts.
Last Updated: June 20, 2012