• Henri Pegeron, Derivatives Compliance, Futures and Options at Fidessa


• 19.04.2016 08:45 am
regulations , Henri is based in Fidessa's New York office with responsibility for product management and compliance, focusing on the firm's derivatives solutions. He joined Fidessa in 2015, bringing with him extensive experience of implementing the rules and requirements guidelines for global regulatory reform - including Dodd-Frank, EMIR and APAC market reforms - at leading clearing houses, asset management firms and swaps data facilities in both the US and Europe.

Open commentary for Regulation AT is now officially over, and while the CFTC mulls over the mostly cautious responses there is some time to reflect on how best to prepare for enforcement of the rules. However, the loftiest piece of proposed legislation in the carte de jour isn’t about futures or traders at all, but the underlying source code of the systems associated with them, which the CFTC sees as a business record under its jurisdiction.

The regulation is proposing that ‘AT Persons’ maintain a production source code repository for their trading systems that can be accessed under the same guidelines as the existing rule 1.31. That is to say, the source code must be “readily accessible” on the menu for two years, and available from the specials board for up to five. A code repository is a critical part of any valid software development lifecycle, but trading platforms will now have to worry about the security and privacy of their intellectual property in addition to implementing safe and efficient coding practices.

It is unlikely, and possibly distracting, to assume that the underlying code alone will be the reason something went wrong. This is especially so in the modern age of algorithmic development where success is measured on ability to learn and adapt to market conditions. Case in point, the CFTC will need to ensure they look at the entire menu in order to analyze any algorithmic trading event before ordering source. The focus on intellectual property should be based on more than mild curiosity given the potential cost to the industry of preparing the dish.