Automated Trader Publishes Update to Regulation AT Article by JP Bruynes and Libbie Walker

In an update to an article that appeared earlier this year in Automated Trader, JP Bruynes and Libbie Walker, partner and associate, respectively, in the investment management practice at Akin Gump, have written “Supplemental Proposal to Regulation AT: What Traders Need to Know,” addressing concerns surrounding the latest changes to the Commodity Futures Trading Commission (CFTC)’s proposals on which market participants will be subject to regulation and CFTC access to proprietary source code.

Bruynes and Walker write that Regulation AT’s primary goal “is to reduce the risk of market disruption posed by automation.” They note that more than 70 percent of futures trading is now automated so the CFTC’s proposal “is intended to modernize [its] regulatory oversight to keep up with the markets.” The supplemental proposal, they say, “primarily modifies the original proposed rulemaking in four areas: the definition of an AT Person, risk controls, annual reporting requirements and CFTC access to source code.”

The article proceeds to detail these four areas, concluding that the supplemental proposal “is an attempt to balance the CFTC’s responsibility to oversee markets and market participants while balancing the concerns of those it is regulating.” The authors add, however, that, with the election of Donald Trump and the controversy surrounding the source code repository, “the source code retention obligation and inspection provision may be significantly amended prior to effectiveness.”

Click here to read the article. For the original article that appeared in the Q2 2016 issue of Automated Trader, please click here.