Energy Metro Desk Editor John Sodergreen discussed the CFTC's proposal to regulate automated trading ("Regulation Automated Trading" or "Reg. AT"), which was the subject of a recent hearing of the House Agriculture Committee. The proposed rule, which seeks to impose a comprehensive regulatory regime for automated trading, inter alia, would require registrants to hold their proprietary source code in data repositories available for inspection by the CFTC and the U.S. Department of Justice.
In response to hearing participants' concerns about Reg. AT's proposed source code provisions – which would allow the proprietary source code of automated trading firms to be accessible to the CFTC and the Justice Department without a subpoena – Mr. Sodergreen implied that the industry's objection may be misguided, contending that regulators have made a "very good argument" for accessing such source code in order to "aid in investigations."
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