The U.S. Commodity Futures Trading Commission may seek comment before July on ways to test and supervise automated and high-frequency trading systems, said Gary Gensler, the agency’s chairman.
The agency, which has scrutinized such trading in the wake of the May 2010 crash that temporarily roiled markets, is considering a so-called concept release, which is a regulatory step prior to publishing proposed new rules for direct market access.
“I’m hopeful we’d put that out for public comment this spring. The document is pretty far along,” Gensler told reporters after a speech at the Agribusiness Club of Washington.
The concept release would cover testing, supervision and protections of participants with direct market access, “to ensure orderly trading in markets,” he said.
The CFTC’s technology advisory committee, led by Republican Commissioner Scott O’Malia, held a meeting yesterday on high-frequency trading.
Automated trading firms’ role in periods of market swings drew attention from regulators after a May 6, 2010, crash that briefly erased $862 billion from the value of U.S. shares.