WASHINGTON (Reuters) - The U.S. Commodity Futures Trading Commission will reestablish a technology advisory committee that will hold hearings to help the agency catch up with the fast-moving financial industry.
The hearings would look into issues such as co-location, swap execution facilities and high frequency trading.
Co-location allows traders to place their computer systems next to exchange servers, giving them the ability to execute strategies at lightning-fast speed through computer algorithms. These market participants are sometimes called high-frequency traders.
CFTC Commissioner Scott O’Malia said on Wednesday the committee would hold its first hearing on July 14 to discuss high-frequency trading. The committee will include representatives from academia, exchanges, clearinghouses, trade repositories, and other groups.
The committee will “discuss how technology is being developed across the industry, how the CFTC should oversee such technology, and what the future holds for technological advancements in our markets so the CFTC can stop playing catch-up, as it has for so long,” O’Malia said in a statement.
The move to reestablish the panel comes as the Securities and Exchange Commission and the CFTC investigate what was responsible for the stock market “flash crash” on May 6 that drove the Dow Jones industrial average down some 700 points within minutes. (Reporting by Christopher Doering; Editing by Walter Bagley)