CFTC NEARS COMMENT PERIOD ON HIGH-FREQUENCY TRADING
- * CFTC commissioner hosts meeting of traders in Chicago
* Chilton favors registering high-frequency traders
* Public comment period set to start soon
By Tom Polansek
CHICAGO, June 11 (Reuters) - The Commodity Futures Trading Commission will soon start a public comment period on how it can better supervise high-frequency and automated trading systems, a commissioner said on Monday as he met with some of Chicago's top traders.
Commissioner Bart Chilton discussed the challenges of regulating high-frequency and algorithmic traders in a meeting at the Chicago CFTC office with Leo Melamed, former chairman of the Chicago Mercantile Exchange; Don Wilson, CEO of DRW Trading Group, one of Chicago's top trading firms; and others.
Before publishing proposed new rules for the traders, the CFTC is preparing to launch a so-called "concept release," in which it will gather feedback from the industry, Chilton said during the meeting.
Chilton did not say when the comment period would begin or how long it would be.
The agency has scrutinized high-frequency and automated trading since the "flash crash" that roiled markets in May 2010.
Chilton, who has been pushing for increased supervision for more than a year, said he favored a rule that would require high-frequency traders to register with the CFTC. The move would also require them to open their trading records to the agency upon request.
"Everything follows from registration," he said.
Other ideas under consideration that were discussed at the meeting included "kill switches," which could stop computer programs from placing automated orders, and improved testing of computer trading systems.
