The US Commodity Futures Trading Commission is to establish a technology advisory committee after admitting that it struggles to keep pace with technological advances and that it continues to use faxes and manual entry forms for reviewing trading account data.
In a statement, CFTC Commissioner Scott O'Malia said the agency will vote later this week to re-establish the CFTC Technology Advisory Committee.
The Committee - which will include representatives from academia, exchanges, clearinghouses, trade repositories, and other groups - will hold its first hearing on July 14 to discuss high-frequency trading. Other issues on the agenda will be co-location, trade repositories, surveillance and security systems, and swap execution facilities.
In a surprisingly frank assessment of the CFTC's own lack of technological savvy, O'Malia said that regulatory bodies must understand and embrace technology in order to be truly effective.
"Unfortunately, here at the Commission, we struggle to keep pace with technological advances as we continue to receive account data via facsimile and enter that data manually," he said.
With Congress expected to provide new authorities to the Commission oversee the OTC market, O'Malia said the agency is about to be hit with a "tsunami" of trade data.
"The fax machine will not provide any assistance whatsoever," he said. "We must do a better job to automate all our forms and systems to handle the massive volume of trade data that will be sent to the Commission."