Commissioner Chilton focused on the regulation of “market cheetahs” (high-frequency traders) in his keynote address to the Trading Show Chicago 2013. Chilton highlighted HR 2292, the PROTECT Act, sponsored by Congressman Ed Markey, which would require registration, testing, kill switches, and increased penalties for violations of the CEA by high-frequency traders.
Chilton also discussed what he views as several problems and potential solutions associated with high-frequency trading:
- The volume of trading done by cheetahs today;
- Potential problems associated with fantasy liquidity created by “wash” trades;
- Chilton’s assessment that the implementation of the new wash blocker guidance should be postponed, pending a more thorough review; and
- Putting cheetahs on notice that they are being monitored by the CFTC.