Technology Advisory Committee Meeting 2.0 opening statement
First Published 20th June 2012
Opening Statement by Commissioner Scott D. O'Malia before the Technology Advisory Committee Meeting 2.0
Scott O'Malia, Commissioner, CFTC Technology Advisory Committee
"This is not the end of the discussion, but just the beginning. Our discussions here today will help direct future work of the working group."
Washington - Commissioner Scott D. O'Malia's opening statement introduced the newly re-chartered Technology Advisory Committee (TAC 2.0) and briefly summarised progress since the reintroduction of the TAC in June 2010.
Mr O'Malia said: "We have covered such issues as pre-trade functionality and pre-trade credit checks, data collection standards, technological surveillance and compliance, the deployment of technology solutions in the swaps market, and most recently, algorithmic and high frequency trading. To put a finer point on what we have accomplished since bringing back the TAC in June 2010 with its 24 charter members, we have:
- Held seven public meetings;
- Established the 19-member Subcommittee on Data Standardization charged with providing recommendations based on public/private solutions for creating well-accepted standards for describing, communicating, and storing data on complex financial products;
- Established the 23-member Subcommittee on Automated and High Frequency Trading charged with advising the Commission on a working definition of high frequency trading ("HFT") in the context of automated trading strategies;
- Issued Recommendations on Pre-Trade Practices for Trading Firms, Clearing Firms and Exchanges involved in Direct Market Access; and
- Issued recommendations on data standardization through the use of legal entity and product identifiers."
Mr O'Malia then welcomed the 16 new members, thanked the original members and introduced the topics for discussion:
The morning panel to focus on presentations from four working groups comprising the Subcommittee on Automated and High Frequency Trading. Each working group to report on their progress towards defining HFT in the context of automated trading, identifying HFT strategies, exploring oversight and surveillance of automated trading and HFT, and identifying market microstructure issues while providing a framework for open discussion within the full TAC. Mr O'Malia stressed that the purpose of the group is to define terms and inform thinking, rather than rule making: "This is not the end of the discussion, but just the beginning. Our discussions here today will help direct future work of the working group."
The afternoon panel will focus on issues relating to the aggregation of liquidity across DCMs and SEFs in the post-Dodd-Frank world. Five panelists will introduce their firms' offerings for efficient execution and optimal liquidity when trading in and across SEFs, DCMs, and platform/exchange aggregators. These panelists include Tom LaSala and Michel Everaert (CME Group), Chuck Vice (ICE), Paul Hamill (UBS), Chris Ferreri (ICAP) and George Harrington (Bloomberg). This will be followed by a discussion.
"Recognizing that the Commission has not finalized the SEF rules, firms have been developing competitive SEF offerings in anticipation of what those final rules will look like. Today's presentations will sample a handful of some of these offerings, all of which provide a slightly different take on a SEF." said Mr O'Malia.
Mr O'Malia also thanked Chief Economist Andrei Kirilenko who yesterday announced his departure from the Commission to join MIT's Sloan School of Management.