The US regulator wants exchanges to police the rules for automated traders
The US Commodity Futures Trading
Commission (CFTC) has proposed new rules governing automated
trading, marking the regulator’s most
comprehensive response to a practice that has come to dominate
derivatives markets in recent years.
The proposed rules, which include a series
of risk controls and transparency measures, take a multi-level
approach with separate requirements for automated traders,
clearing members, and trading venues.
The CFTC said on Tuesday the proposed
rules would reduce the potential risks by requiring risk
controls such as maximum order message and order size
parameters, along with the establishment of standards for the
development, testing, and monitoring of algorithmic trading
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