WASHINGTON, D.C. – Today the House passed a bipartisan amendment offered by Congressman Sean Duffy (WI-07) and Congressman David Scott (GA-13) to prohibit the Commodity Futures Trading Commission (CFTC) from taking intellectual property without first issuing a subpoena. 

Farmers rely on the futures markets, which is regulated by the CFTC, to hedge against price risks. Traders use computer algorithms to help execute trades but their proprietary source codes are being threatened by new CFTC rules which would allow the Commission to access such intellectual property without a subpoena. This is a dangerous and unprecedented assault on due process that could bleed over into other forms of IP. 

Speaking on the House floor during debate on his amendment, Congressman Duffy said, “Protecting intellectual property is a cornerstone of our free enterprise system… This is highly-sensitive source code. This is intellectual property that helped the functionality of our marketplace. And to think that this kind of sensitive data can be taken by the federal government without a subpoena should shock our conscience.”

Click HERE or the image below to watch Congressman Duffy speak on the House floor on behalf of this amendment. 

Background: In December 2015, the CFTC proposed new rules on automated trading, known as Regulation Automated Trading (or “Reg AT”). While much of the proposed rule is noncontroversial, section 1.81 takes the unprecedented step of requiring a wide array of market participants engaged in algorithmic trading to maintain a source code repository and make it available for inspection by the CFTC or the Department of Justice without a subpoena. In June, Rep. Duffy sent a bipartisan letter to the CFTC opposing the source code provision.

WI-7