CHICAGO Aug 23 The U.S. Commodity Futures
Trading Commission is preparing to reveal a laundry list of
potential options to increase oversight of high-speed and
automated trading, an agency official said on Friday.
The CFTC will likely approve the release of a report, which
includes more than 100 questions about how high-frequency
traders impact markets, next week, according to the official,
who declined to be named because the report is not yet public.
The public will be able to respond to the questions and
submit comments on the report, called a concept release.
The CFTC's Technology Advisory Committee is expected to
discuss the report at a meeting on Sept. 12.
Scott O'Malia, a CFTC member who chairs the committee, could
not be reached for comment. Stevem Adamske, a CFTC spokesman,
did not respond to a request for comment.
A favored tool of hedge funds and other institutional
traders, high-frequency trading uses so-called algorithmic
software programs to post orders in the blink of an eye.
The practice accounted for more than 60 percent of all
futures volume in 2012 on U.S. exchanges such as CME Group Inc
and IntercontinentalExchange Inc, according to
New York industry researcher The Tabb Group.
However, a string of computer glitches have roiled markets
recently and raised concerns about the reliability of electronic
markets. The latest occurred on Thursday, when the trading of
thousands of U.S. stocks ground to a halt after a technological
problem shut down the Nasdaq for just over three hours.
An over-arching theme of the report is whether trading
controls should be applied more uniformly to exchanges and firms
to improve oversight of fast traders, the CFTC official said.
A system to "tag" high-frequency trading firms with
electronic identifiers is among the options to toughen scrutiny,
the official said. The tags could help regulators reconstruct
disruptive market events in the future, he added.