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Walt Lukken, President and Chief Executive Officer of FIA electronic trading

FIA praises CFTC for adopting Electronic Trading and Bankruptcy rules

FIA President and CEO Walt Lukken today made the following statement after the CFTC voted to finalize Electronic Trading Risk Principles and significant bankruptcy reforms for FCMs and clearinghouses, among other rulemakings. The CFTC electronic trading proposal reflects a carefully reasoned principles-based approach that provides flexibility to the agency and builds on the industry’s efforts over the years to mitigate risks. FIA also recommended several changes to the original bankruptcy proposals, which were adopted unanimously by the CFTC.

“Electronic trading has brought enormous benefits to markets and customers through greater efficiency and deeper liquidity, but like any new technology it also creates new risks. For that reason, FIA and FIA PTG have worked for more than a decade to develop best practices for identifying those risks and protecting the markets from disruptions.  Finalizing these rules represents a collaborative effort and results in a principles-based approach for managing the risks in the technological revolution that continues to transform these markets.”

Lukken continued: “FIA also today appreciates the work of the commission and staff of the CFTC for working with the industry to finalize rules that reform the bankruptcy rules for FCMs and clearinghouses. The finalization of this rule, the first update in decades, will improve clarity for companies and transparency for the public.”


Electronic Trading: For more than a decade, FIA and FIA PTG have taken a leadership role in identifying risks and strengthening safeguards related to electronic trading in the futures markets globally. Since April 2010, FIA has published six papers proposing industry best practices and guidelines related to these important topics. In addition, FIA has submitted comprehensive responses to numerous CFTC discussions and rulemaking initiatives and participated in multiple CFTC-hosted meetings and industry roundtables. For example, in October 2019, Alicia Crighton, managing director at Goldman Sachs and a member of the FIA board of directors, presented to the CFTC’s Technology Advisory Committee FIA’s best practices for exchange risk controls related to automated trading systems. FIA commends the CFTC for its deliberate approach to this rulemaking and welcomes the opportunity to continue to work with the CFTC and market participants to promote safe, reliable, and vibrant electronic markets.

Bankruptcy Reform: FIA commented in July on the CFTC’s recent update to Part 190 of the agency’s regulations dealing with the bankruptcy of FCMs and clearinghouses. In the response, FIA generally supported the commission’s recommendations, but cautioned that a new section (subpart C) would establish a new regime to govern the bankruptcy of a clearinghouse and should be studied further before being approved. FIA appreciates the changes to the proposal and for working with industry to improve the product.

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