CFTC Keeps Source on the Menu

CFTC Keeps Source on the Menu

Henri Pegeron

Derivatives Compliance, Futures and Options at Fidessa

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.

Views 646

CFTC Keeps Source on the Menu

19.04.2016 08:45 am

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.

Latest blogs

Martijn Bos Holland FinTech

Making it through the rain: Finance in times of turmoil

You’d need to be living on a remote island, without electricity or internet to not be aware of what the world is going through right now – a medical crisis that has spread across the world and disrupted supply chains, goods and services production, Read more »

James Devoy Sysnet Global Solutions

PCI DSS and Remote Assessments

COVID-19 is obviously changing many aspects of daily life. Some will be short term measures to see us all through these times, although I wonder how many will become more permanent fixtures in our lives. The PCI SSC has provided guidance to allow Read more »

James Booth PPRO

Brave New World: A Futuristic Vision of Payments

Over the last ten years, the retail e-commerce ecosystem has undergone a wide-ranging transformation. As recently as 2010, the e-commerce and payments value chain were relatively straightforward: Any eCommerce merchant could integrate a payment Read more »

Nish Kotecha Finboot

How blockchain could potentially transform global healthcare in the wake of COVID-19

In the globalised world we live in, entities such as the World Health Organization (WHO) have been established to ensure cooperation between different governments on global health-related issues. In the face of pandemics such as the one we are Read more »

Lina Andolf-Orup Fingerprints

Dispelling biometric myths and misconceptions

Gangsters cutting off enemies’ fingers to access secret locations and spies lifting fingerprints from martini glasses - the imagination of the entertainment world has been running wild ever since biometrics entered the scene. Couple that with the Read more »

Related Blogs

Helen Bevis SteelEye

How Tech Can Meet the Challenges of Increased Market Surveillance

There is growing pressure across the financial services industry for firms to detect market abuse and ensure their companies protection against manipulative market risk. With the emergence of regulations such as the Markets in Financial Instruments Read more »

Linda Jamison Wolters Kluwer

Regulatory Relief in The USA: A Wolters Kluwer View

Regulatory relief for mid-size banks in the US is here– and it’s a potential game changer when it comes to implementing the right regulatory reporting IT systems. With that in mind the nation’s banks would be well advised to adopt an integrated Read more »

Ivy Schmerken FlexTrade

MiFID II Regulations to Impact U.S. Asset Managers

North American broker-dealers and asset managers domiciled in the U.S. are watching their European counterparts gear up for compliance with MiFID II. But will MiFID II affect U.S. broker-dealers and asset managers based in the U.S.? Could the Read more »

Steve Grob Fidessa

Mexico Blues

Back from a couple of weeks in Mexico where it seemed the whole world was going steadily insane (or maybe that was just the tequila). Anyways, it was reassuring to start the week with another “wow is that what they really meant?” moment whilst Read more »

Chris Skinner The Financial Services Club

America’s Banking Regulations Strangle Innovations

Only three new banks have opened in the United States since 2010.  Before the financial crisis, over 100 banks set up shop each year, on average, according to data from the Federal Deposit Insurance Corporation, the agency that approves new banks. Read more »

Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel