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Alternative Market Briefing

CFTC passes new registration rule, launches high frequency trading working group

Friday, February 10, 2012

amb
Gary Gensler
Bailey McCann, Opalesque New York:

The Commodity Futures Trading Commission (CFTC) is moving forward on several key changes. It finalized a new rule yesterday that will require commodity pool operators (CPOs) and commodity trading advisors (CTAs) to register with the regulator and to follow once again certain compliance requirements. In addition, the Commission has also started a working group to examine high frequency trading to determine how to regulate the practice.

The new rule is the result of a request by the National Futures Association to end a 2003 exemption from registration given to CPOs and CTAs. The new rule increases transparency to the CFTC of CPOs and CTAs acting in the futures and swaps markets and enhances protections for their customers.

CFTC’s Chairman Gary Gensler said in his statement of concurrence, that these amendments are consistent with the Dodd-Frank Act, and that the Commission agreed with the request due to the significant uptick in commodities investments by CPOs and CTAs and retail investors alike. He said that by giving the funds the exemption, it created dark pools of investment that now need to "come into the light." The rule requires funds to report to the CFTC thei......................

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