A CFTC proposal to amend Part 38 ("Designated Contract Markets") of the CFTC Rules to include electronic trading "Risk Principles" was published in the Federal Register. Comments on the proposal must be submitted by August 24, 2020.
As previously covered, the amendments consist of three applicable "risk principles" for designated contract markets ("DCMs"):
- the implementation of exchange rules intended to identify, alleviate and prevent market disruptions and electronic trading systems anomalies;
- the establishment of "exchange-based pre-trade risk controls" for all electronic orders; and
- prompt notice to the CFTC by DCMs of "significant disruptions" to their electronic trading platforms.
Originally published July 15, 2020.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.