CFTC Outlines OTC Agenda

March 10th, 2015

Commodity Futures Trading Commission (CFTC) Chairman Timothy Massad delivered a keynote address before the Institute of International Bankers on March 2, 2015.  Chairman Massad’s speech focused on the agency’s efforts to-date and ongoing work to regulate the over-the-counter (OTC) swaps market.  Importantly, he laid out the agency’s regulatory plans for the next couple of months.

Chairman Massad noted that the CFTC had accomplished much over the past year to regulate the OTC market, and bring it “out of the shadows,” where it had previously suffered from the “absence of regulation.”  The agency has worked to clear more market transactions, brining the total percentage of cleared transactions from 15 percent in 2007 to 75 percent today.  Despite “good progress,” said Chairman Massad, “there is much work that remains.”

For the rest of 2015, the CFTC will focus on finishing OTC rules required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).  Then, the agency will harmonize those rules with other domestic and international regulations.  Chairman Massad said the agency was also working to “fine tune” and amend existing rules, predicting new amendments on the rules on trading of swaps on swap execution facilities in the coming months.  The CFTC is also bolstering its oversight of clearinghouses, with “robust surveillance.”  Finally, the agency expects to finish its proposed Margin Rule for Uncleared Swaps and address cross-border issues later this year.

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