The Commodity Futures Trading Commission has approved a supplemental proposal to Regulation Automated Trading (Regulation AT), which was initially proposed in November 2015. In the initial proposal, the CFTC proposed a comprehensive set of rules affecting futures traders that use algorithmic trading systems.
A Katten client advisory, “Proposed CFTC Regulation To Impact Algorithmic Trading and Traders,” describing the initial proposal, is available here.
In the supplemental proposal, the CFTC seeks to address feedback it received in response to its initial proposal. Specifically, the supplemental proposal introduces a volume threshold test with respect to “AT persons” and amends the definition of “direct electronic access.” The supplemental proposal also revises the requirements regarding pre-trade risk controls, establishes new procedures by which the CFTC may request access to AT Persons’ source code, and addresses obligations of AT Persons that use third-party algorithms, among other things.
Katten’s recently published client advisory, “CFTC Approves Supplemental Proposal to Regulation AT,” on the supplemental proposal, is available here.
The CFTC’s supplemental proposal is available here.