CFTC to consider what to do when algorithms go awry

10/8/2010 | Securities Technology Monitor

The Commodity Futures Trading Commission is looking into how technology can be used to help implement Dodd-Frank Act measures, but is also considering what to do when algorithms cause market disruptions, such as the May 6 "flash crash." Scott D. O'Malia of the CFTC questions how to hold errant technology responsible for such events. "When does high frequency or algorithmic trading cross the line into being disruptive to our markets?" O'Malia asks. "And, along those same lines, who is responsible when technology goes awry? Do we treat rogue algorithms like rogue traders?"

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