Open House At The CFTC: Public Meeting To Be Held On Automated Trading & SEFs

The U.S. Commodity Futures Trading Commission (CFTC) has announced today that its Technology Advisory Committee (TAC) will hold a public meeting on Tuesday, January 21, 2014 from 10 a.m. to 5 p.m. at the CFTC headquarters in Washington, D.C., in order for committees and subcommittees to discuss the currently hot topics of automated trading, high-frequency trading (HFT), and swap Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term facilities (SEFs).

Indeed, whilst regulatory authorities in other jurisdictions, and chiefly European Union government law-makers are embarking on setting forth a continual barrage of rulings aimed at stemming the order flow generated via these means, the US is home to the vast majority of proprietary trading firms, HFT participants.

With the Volcker Rule having been introduced last month, only banks are prohibited from engaging in short-term proprietary trading of securities, derivatives, commodity futures and options on these instruments for their own account, however should this be extended to cover institutional FX entities, most definitely the cat will be set among the pigeons, especially now that the quality and availability of connectivity to venues in other regions is advancing.

Interestingly, regions which are not part of the global initiative which Japan, the United States and the European Union are participating in as a means of establishing a degree of standardization as to how institutional FX trading is regulated are also beginning to show reluctance toward allowing HFT on their respective markets, notably Russia, which introduced a 25 ruble commission for executing trades which could dissuade HFT participants, despite the high-speed points of presence provided by TMX Atrium which connect the Moscow Exchange to Frankfurt, London and financial centers in North America.

Last year, the CFTC granted temporary SEF status to a number of companies, confirming expectations that America would pave the way ahead for a global standard on how OTC Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term and derivatives are handled. In this particular meeting, the committees and subcommittees will cover this matter in detail.

The TAC meeting will be open to the public with seating on a first-come, first-served basis. Audio of the meeting will be available via a listen-only conference call. After the meeting, a transcript of the meeting will be published through a link on the CFTC website subsequent to the meeting.