“What a Concept”

Opening Statement of Commissioner Bart Chilton Before the CFTC Technology Advisory Committee Meeting

June 20, 2012

Thanks to Commissioner O’Malia for his leadership of the Technology Advisory Committee and his keen attention to issues surrounding technology in trading—something that I think represents an issue that we will be continually facing as these markets morph at warp speed. Thanks, too, to the TAC members, including the new members.

On the issue of high frequency traders (HFTs), who I’ve termed “cheetahs,” I’ve been suggesting for a long time now that they be registered with our agency. We don’t even know who is out there and as a pedestrian first-step, they simply ought to be registered so we at least know who they are. What a concept.

Secondly, I believe that in addition to the registration requirement, we require testing of algo programs (HFTs and ATSs) before they are engaged in the market production environment. Also, the programs should have kill switches in case they go feral.

We need to require quarterly reports on their wash sales and we need to make sure that they undertake efforts to stop those from occurring. After all, they are illegal.

And finally, HFT executives must be accountable for such reports.

I look forward to the issuance of a concept release related to technology very soon. Commissioner O'Malia has done a lot of good work on these issues and I’m hopeful that as part of this concept release, these ideas will be included and we will receive some public comments to facilitate us moving forward.

I look forward to today’s meeting. Thank you.

Last Updated: June 20, 2012