CFTC Technology Advisory Committee Meeting (with Delta Strategy Group Summary)

The CFTC held a Technology Advisory Committee (“TAC”) meeting chaired by CFTC Commissioner Scott O’Malia to cover subjects such as swap data reporting, the CFTC concept release on automated trading, swap execution facilities (“SEF”), and made available to trade submissions (“MAT”).  Key takeaways from the meeting include suggestions for basic market structure improvements in response to the concept release targeting algorithmic trading, as well as a  discussion of the approaching October 2 deadline for mandatory SEF registration. 

Lofchie Comment:  The attached Delta Strategy Group summary of the TAC meeting is very thorough. While the summary should be reviewed by anyone with an interest in the development of CFTC requirements, the most significant part of the summary is the panel discussion of “Credit Checks and Clearing Certainty.”  It is somewhat remarkable that just before the launch of SEFs, there is complete uncertainty as to whether, or how, trading on SEFs will proceed in the absence of clearing certainty.  It is also somewhat surprising that the CFTC staff seems to be taking a view on how a broken trade should be handled (according to staff, treating it as if it never happened seemingly without the payment of damages) as that more properly seems a matter of negotiation between the parties.

Click here for a summary of the TAC meeting authored by  Delta Strategy Group.

See: CFTC Chairman Gensler’s TAC Meeting Statement; CFTC Commissioner Chilton’s TAC Meeting Statement.
See also: CFTC Concept Release on Supervision and Regulation of Automated Trading (with Delta Strategy Group Summary) (September 10, 2013); CFTC Publishes Text of SEF Rules (May 21, 2013).