MFA submitted a letter to the Securities and Exchange Commission(SEC) regarding computer trading and risk management issues. MFA noted in the letter that we have been strong proponents of technological advances that have empowered investors with more efficient methods to access markets and execute their investment strategies globally. MFA suggested that the SEC consider new tools to help prevent computer trading errors to better manage risk moving forward. Among these, MFA noted possible enhancements to risk management and technology implementation controls, more routine testing of software, naming a designated principal to suspend all or part of a firm’s trading program in the event of a malfunction, and the implementation of the limit up-limit down mechanism as soon as possible.
MFA also noted that all market participants have a vested interest in keeping pace with market structure advancements. New guidelines, best practices, and test protocols could appropriately manage risks while maintaining the progress that has been achieved through technological advancements, and MFA is prepared to work with the SEC and other market participants on such measures.