The FIA Principal Traders Group today issued the following statement in response to the release of the Joint CFTC-SEC Advisory Committee’s recommendations regarding regulatory responses to the market events of May 6, 2010.
“The members of the FIA Principal Traders Group commend the Joint CFTC-SEC Advisory Committee for producing an extremely thorough and thoughtful examination of the policy issues arising from the extraordinary market turmoil that occurred on May 6 of last year. We strongly support the committee’s focus on market structure issues and look forward to responding to the committee’s recommendations through the public comment process.
“While we have not yet had an opportunity to consider the recommendations in detail, we share the committee’s concerns about the fragility of the U.S. equity markets during times of market stress. We agree with the committee’s conclusion that market-based incentives are more effective than mandatory obligations in promoting well-functioning markets, and we look forward to working with the regulators and the exchanges on developing safeguards that will prevent clearly erroneous trades and other market malfunctions.
“Members of the FIA PTG are working closely with the Commodity Futures Trading Commission and the Securities and Exchange Commission to help improve their understanding of current market practices and technology advancements. The FIA PTG has been proactive in providing both agencies with detailed recommendations on how to improve industry risk controls, many of which can be implemented today by exchanges, brokers and other market participants.”