For workers trying to understand the safeguards behind financial markets, the important change in CFTC’s November 25, 2016 proposal is who would check automated orders. This November 26 weekend retrospective concerns a proposed two-level structure, not a new protection already operating for retirement savings. The documents do not measure losses or gains for those savers. [2016-27250]

The agency’s December 2015 proposal had sought a comprehensive approach to automated trading on designated contract markets, combining risk controls with transparency. That baseline matters: the public-interest question was not simply how quickly firms could trade, but how order placement and execution would be governed as markets became electronic. The supplement leaves unamended proposals under consideration. [2016-27250][2015-30533]

Under the revision, controls would sit at the automated trading person or its futures commission merchant, and at the exchange. A trading firm could delegate its pre-trade controls to that intermediary. Separately, a proposed scope test used 20,000 contracts traded daily on average over six months, including proprietary and customer accounts across designated contract market products. [2016-27250]

That division offers a concrete accountability question: which institution would operate the check before an order reaches the market? The volume test is not a blanket exemption from safeguards. Nor do fewer proposed layers prove less protection or lower costs. Comments were due January 24, 2017. These two documents trace one CFTC proposal’s development, rather than independently demonstrating that households would be safer. [2016-27250][2015-30533]

Source documents

  1. Regulation Automated Tradinghttps://www.govinfo.gov/content/pkg/FR-2016-11-25/html/2016-27250.htm
  2. Regulation Automated Tradinghttps://www.govinfo.gov/content/pkg/FR-2015-12-17/html/2015-30533.htm