This is some of the regulation-related commentary I have seen from the threads I have reviewed:
TL;DR: I have yet to see any regulatory issues with this version of solution to the problem that others have found roadblocks in.
Matthew in 2020: “The CME has taken the position that prices are not allowed to change too much on their futures exchanges.” Important reference
This is the reason behind C2 imposing position size limits on strategy managers. The suggestion I outline would be cooperative towards this goal.
@KarlA in 2016 vaguely mentions regulation, but differentiates between a vendor trying to limit scaling and an individual strategy having limits. Perhaps this is the key, if C2 is the vendor?
Other replies in this thread imply or refer to regulatory hurdles for transaction/volume-based compensation, which is the inverse of what is being suggested here. Rather, C2 already imposes its own scaling limit via paid Investor plan, but I think it would be valuable to open this control feature up to strategy managers as well. I also believe that this feature would enrich the ecosystem of strategy managers willing to contribute their systems, thus benefiting C2 as a platform innately, on top of the additional subscription fees.
I see one or two threads from @Daniel_goldshtein who is presented with the same problem, however Daniel’s approach to solving it is slightly different - wanting strategy managers to profit whenever a subscriber chooses to scale. To which, Matthew very bluntly states, “it’s a regulatory problem.”
I wish I could point to specific regulations, but I am still early in my learning and don’t even know what regulatory bodies C2 is subject to other than CME. Hopefully someone else can chime in with greater insight?
