CFTC keeps source on the menu

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.

Leave A Comment

Copyright © 2019 Fidessa Group Holdings Limited. All rights reserved.

The information contained within this website is provided for informational purposes only. Fidessa will use reasonable care to ensure that information is accurate at the time it is made available, and for the duration that it remains on the site. The information may be changed by Fidessa at any time without notice. We also reserve the right to close the website at any time. No representation or warranty, expressed or implied, is given on behalf of Fidessa or any of its respective directors, employees, agents, or advisers as to the accuracy or completeness of the information or opinions contained herein or its suitability for any purpose and, save in the case of fraud, all liability for direct, indirect, special, consequential or other loss or damages of whatever kind that may arise from use of the website is hereby excluded to the fullest extent permitted by law. Any decisions you make based on the information in this website are your sole responsibility and information on the website should not be relied upon in connection with any investment decision.

The copyright of this website belongs to Fidessa. All other intellectual property rights are reserved.

Reproduction or redistribution of this information is prohibited except with written permission from Fidessa.