RegAT – round 2

Regulation AT forges ahead, this time with a Round 2 panel convened on June 10th at which the CFTC focused the discussion on five major sticking points:

1. Amendments to the proposed definition of direct electronic access (DEA)
2. Quantitative measures to establish the population of persons
3. Alternatives to require each person defined as an “AT Person” to implement and utilize pre-trade risk controls
4. AT Persons’ compliance with requirements under RegAT when using third-party algorithms or systems
5. Source code retention and access

Round 2 is a welcome step in the right direction, and by revisiting these topics with the people who know them best, we can take a proactive step towards demystifying RegAT. The choice of topics also reveals a sense of urgency in getting RegAT moving, and soon. That sentiment was echoed by CFTC Chairman Massad at a conference in New York earlier this month where he expressed a willingness to split RegAT into more digestible parts.

The next question is what to expect in Round 3. The untold story of RegAT is that the effectiveness of US-based regulation can so often depend on the person serving as US President at the time of its implementation. RegAT faces a race of its own, then, to get the rules finalized before the current political uncertainty materializes into a reality in November.

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