With high frequency trading now one of the most buzzed-about issues in the industry, co-location, a technique used by many high frequency traders of placing trading servers near an exchange’s matching engine to reduce order message times, is now a hot topic too. The Futures Industry Association hosted a panel of experts yesterday in Chicago to discuss co-location: its growth, its advantages and challenges on the horizon. (more…)
With high frequency trading getting a lot of (mostly negative) attention these days from Washington lawmakers and the media, the Futures Industry Association (FIA) and a coalition of trading firms have formed a group to advocate for the interests of firms trading for their own capital. The FIA Principal Traders Group (PTG) is a forum for firms trading their own capital to identify and discuss issues confronting the principal traders community. PTG has appointed as its spokesperson industry veteran Jim Overdahl, former chief economist for the SEC and CFTC.
Regulation talk was all the rage at the Futures Industry Association’s annual expo in Chicago today. In his keynote address, Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler reiterated past talk about over the counter (OTC) derivatives clearing reform and CFTC-SEC harmonization. Exchange leaders also weighed in with thoughts about how some of the proposals coming down the pike could make the U.S. futures industry less competitive.
CME Group CEO Craig Donohue provided a spirited defense of the CME clearing model that was recently questioned in a Department of Justice comment letter during a luncheon speech at the Managed Funds Association conference in Key Biscayne, Fla. Donohue called the comment letter “an ill-timed and ill-conceived suggestion,” and also pointed out that half of the positions of rogue trader Jerome Kerviel’s SocGen trades which resulted in the $7.2 billion loss were not subject to central party clearing and suggested that that helped make the fraud possible. Donohue said “the futures markets are a shining example of what could be right” with the clearing structure. John Damgard, president of the Futures Industry Association (FIA), who was also in attendance during the speech, said he thought it was surprising that Donohue would take aim at the investment banks, who are his biggest customers and substantial owners of the merc. submitted by Dan Collins
