US CFTC should slow rapid rule-making pace

WASHINGTON  (December 05, 2010)

The US futures regulator needs to slow down its furious pace for writing rules to implement its share of Wall Street reforms, the head of a commodity industry group said on Friday, noting key issues need more deliberation. The Commodity Futures Trading Commission has between 50-60 detailed regulations to finalise by July that will give it oversight of the $600 trillion over-the-counter swaps market – an unprecedented task because of the volume of rules and their velocity, said the president of the Commodity Markets Council, Christine Cochran.

“The industry feels like it is drinking from a fire hose,” Cochran told the Reuters Global Ags Forum, an online chatroom for grain traders. The Dodd-Frank financial reform law gave the CFTC the tough deadline – but the council, which lobbies on behalf of commodity exchanges and their users, that has urged the CFTC to ask Congress for an extension. “These are important issues. They merit more deliberation than can be given to them in 12 months,” Cochran said.

Earlier this week, the CFTC outlined how it plans to define swap dealers – firms that will face extra costs and scrutiny. “We are troubled that if you are classified as a swap dealer for one asset, you will be treated as an swap dealer for all asset classes,” Cochran said. The council also hoped the CFTC would exempt entities that only trade exchange-cleared swaps from the swap dealer definition to ensure markets remain deep and liquid, she said.

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