One Step Forward, Two Steps Back

Rob Daly, Sell-Side Technology

The US Commodity Futures Trading Commission (CFTC) plans to convene its Technology Advisory Committee (TAC) on March 1—rescheduled from its original date of January 27—for its third meeting, which will be webcast for those who can’t attend.

The agenda is scheduled to include pre-trade functionality, direct market access (DMA) controls, and costs and technology challenges in implementing the trade execution, processing and records management requirements of the Dodd–Frank Act. I also understand if there is any extra free time the topics of achieving cold fusion and peace in the Middle East will also be addressed.

Yes, I'm a little flippant about this. Trying to cover all of those issues in a single meeting seems foolhardy, unless the goal is to run through the checklist as fast as possible without having a meaningful discussion.

When I first heard last year that the CFTC was setting up TAC, I was pleased. It was about time that the regulators had a standing body that could discuss and explore the technological impact of market regulations now that it is impossible to put the markets and technology in separate categories.

Then the news broke that the US Congress is not increasing the funding for the regulator to handle the implementation of all the new mandates, which in turn has forced it to cut its own IT budget by $11 million.

Without this funding, how does Congress expect the CFTC to process all the data firms must submit to comply with Dodd–Frank? Hard copy?

If the government puts this mandate on the markets, at least it should allocate enough funding so that the regulation actually has a chance of working. At this rate, I'm not sure how the industry and the CFTC is going to pull it off.

Send me your thoughts on the topic at [email protected].



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