CFTC – Proposed Rule – Electronic Trading Risk Principles

July 15, 2020 – The CFTC is proposing amendments to its regulations to address the potential risk of a designated contract market’s (“DCM”) trading platform experiencing a disruption or system anomaly due to electronic trading.

The proposed regulations consist of three principles applicable to DCMs concerning:

  1. The implementation of exchange rules applicable to market participants to prevent, detect, and mitigate market disruptions and system anomalies associated with electronic trading
  2. The implementation of exchange-based pre-trade risk controls for all electronic orders; and
  3. The prompt notification of the Commission by DCMs of any significant disruptions to their electronic trading platforms.

The proposed regulations are accompanied by proposed acceptable practices, which provide that a DCM can comply with these principles by adopting and implementing rules and risk controls that are reasonably designed to prevent, detect, and mitigate market disruptions and system anomalies associated with electronic trading.

Comments must be received on or before August 24, 2020.

For more information, visit www.federalreserve.gov



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