On March 14 2019, the Committee submitted a comment letter to the Commodity Futures Trading Commission (“CFTC”) regarding a rule amendment certification filing by ICE Futures U.S., Inc. (“IFUS”) to amend its order execution rule.

IFUS’ proposed rule amendment would allow for what IFUS calls “Passive Order Protection (“POP”) Functionality.” As described by IFUS, POP Functionality would create a “couple of millisecond” speed bump for “incoming orders that would otherwise transact immediately opposite resting or ‘passive’ orders” thus providing the trader who placed the resting order a “delay window” in which the trader can modify its resting order based on “external market conditions.”

The Committee recommended that the CFTC not approve the proposed amendment. As the Committee previously wrote to the Securities and Exchange Commission regarding U.S. equities markets, asymmetric speed bumps “could distort markets and . . . [e]xchanges should . . . not be broadly permitted to adopt intentional delays.” In the Committee’s view, any intentional delays should be “equally applied to all market participants.”

The Committee’s letter can be found here.