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Bailey McCann, Opalesque New York:

The Commodities Futures Trading Commission has proposed a round of new changes for algorithmic traders that will significantly impact what firms need to keep on hand in terms of books and records. Those changes also require a full source code repository for any algorithms. The proposed Regulation AT aims to address the inherent risks in algorithmic trading that may undermine the integrity and safety of U.S. markets.

According to a client alert from attorneys at Akin Gump, many of the changes included in Regulation AT are already in use throughout the industry. The rule itself just codifies widely held practice into regulation. However, the provisions would require individuals who have not previously registered to become registered with the CFTC and, at least, one registered futures association (RFA) under a broadened definition of what it means to be a "floor trader."

Other expanded definitions create rules around what it means to do algorithmic trading, be an AT person, or have an algorithmic trading event. In addition, attorneys write - "To minimize the operational risk of Algorithmic Trading, Regulation AT would require that AT Persons develop and implement written policies in the following four areas: (1) ATS development and testing; (2) ATS monitoring; (3) ATS compliance; and (4) Algorithmic Trad......................

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