WASHINGTON (Reuters) - The U.S. Commodity Futures Trading Commission risks hurting markets if it is too aggressive in flexing its regulatory muscle to rein in high-frequency traders, exchanges and participants are expected to tell the agency on Wednesday.
The U.S. futures regulator's technology committee will hold the first in a series of public meetings with exchanges, clearinghouses, trading firms, and other groups as it considers how to adapt to the rapidly evolving world of algorithmic and high-frequency trading.
Lightning-fast computer strategies that determine how, when and what to trade have added liquidity, depth and transparency to markets, reducing overall costs, the chief operating officer of the world's largest futures exchange said in a statement -- part of a 181-page information packet released by the CFTC ahead of the meeting.
"Careful consideration should be given to any decision to impose restrictions or limitations on algorithmic and high frequency trading that would be harmful to the marketplace and result in less efficient and less liquid markets," said Bryan Durkin, chief operating officer and managing director with CME Group Inc.
High-frequency trading (HFT) accounts for about 35 percent of U.S. futures volumes -- a number that some expect will reach 60 percent by the end of the year.
The CFTC's arcane technology has been outpaced by the state-of-the-art hardware and software used by the traders it polices. It finds itself grappling with the complexities of sub-millisecond trades and terahertz processors as technology becomes an even more vital component of the futures and derivatives markets.
The futures regulator still relies on fax machines to receive some trade information, an anachronism it can no longer afford as it grapples with a five-fold surge in U.S. futures trading volume over the past decade and prepares to take oversight of even larger over-the-counter derivatives markets.
http://abcnews.go.com/Business/wireStory?id=11156558
The futures regulator still relies on fax machines....hahahahahahah
The U.S. futures regulator's technology committee will hold the first in a series of public meetings with exchanges, clearinghouses, trading firms, and other groups as it considers how to adapt to the rapidly evolving world of algorithmic and high-frequency trading.
Lightning-fast computer strategies that determine how, when and what to trade have added liquidity, depth and transparency to markets, reducing overall costs, the chief operating officer of the world's largest futures exchange said in a statement -- part of a 181-page information packet released by the CFTC ahead of the meeting.
"Careful consideration should be given to any decision to impose restrictions or limitations on algorithmic and high frequency trading that would be harmful to the marketplace and result in less efficient and less liquid markets," said Bryan Durkin, chief operating officer and managing director with CME Group Inc.
High-frequency trading (HFT) accounts for about 35 percent of U.S. futures volumes -- a number that some expect will reach 60 percent by the end of the year.
The CFTC's arcane technology has been outpaced by the state-of-the-art hardware and software used by the traders it polices. It finds itself grappling with the complexities of sub-millisecond trades and terahertz processors as technology becomes an even more vital component of the futures and derivatives markets.
The futures regulator still relies on fax machines to receive some trade information, an anachronism it can no longer afford as it grapples with a five-fold surge in U.S. futures trading volume over the past decade and prepares to take oversight of even larger over-the-counter derivatives markets.
http://abcnews.go.com/Business/wireStory?id=11156558
The futures regulator still relies on fax machines....hahahahahahah
