Posts tagged ‘CFTC’
When the proposed rule release hit the airwaves back in January, the shock was deafening. This would be the Commodity Futures Trading Commission’s (CFTC) proposal: Regulation of Off-Exchange Retail Foreign Exchange Transactions. The industry was well aware new regulations were in the works, it just wasn’t so sure of the details. And as they say, the devil’s in the details.
One of our contacts in the forex industry forwarded me a note with a link to the comment letters on the Commodity Futures Trading Commission rule proposal limiting leverage for retail forex traders to 10-1. There are nearly 5,000 comments and from the couple of dozen I saw, people are hopping mad.
Yesterday, we spoke with CFTC and Congress about how new regulation coming out of Washington would affect traders. We also sat down with former CFTC Chair Sharon Brown-Hruska, now a vice president in NERA’s securities and finance practice. Brown-Hruska says that while it’s justified for the CFTC to crack down on illegal forex operations, the agency’s current proposal to limit leverage in OTC forex to 10:1 “overshoots the mark.”
Continue reading ‘From Washington: Get ready, new regs coming’ »
With regulatory reform in Washington THE issue affecting the futures industry right now, Futures magazine is in D.C. this week to talk with Congress and the CFTC about what’s ahead.
House Agriculture CommitteeChairman Collin Peterson (D-MN), whose Peterson-Frank Amendment to HR 4173, passed by the House in December, established a central clearing requirement for OTC derivatives, says, “the way our legislation is crafted right now, you will see a lot of [OTC products] standardized, 70%-80% of this stuff will be standardized.” He mentioned how the House Ag Committee is working with European regulators and that CFTC Chairman Gary Gensler is focused on coming out with harmonized international regulation.
Continue reading ‘From Washington: Futures goes to Congress, CFTC’ »
Forex dealers are not taking the latest rogue regulatory action – CFTC’s proposal to limit leverage in OTC forex - lying down. Last week, the Forex Dealers Coalition (FXDC), a group of the nine largest firms in the industry, sent a letter to the CFTC saying its proposal to limit leverage to 10-1 would “be a crippling blow to the industry and drive it offshore.” The CFTC kicked off its 60-day comment period last week, after which it will make its decision on the proposal. You can get more information and send a letter to the CFTC through FXDC’s Web site, www.fxdc.org. How will the proposal affect your trading? Leave your comments below.
The credit crisis and various financial scandals of recent years have changed the landscape for U.S. regulators. In was strong regulation and out was warm and fuzzy talk of public/private cooperation. In also was supposed to be interagency cooperation.
While one of the five key objectives of the Obama Administration’s audacious regulatory overhaul proposal was to Establish comprehensive supervision of financial markets and it set as a goal harmonizing regulatory regimes to prevent regulatory arbitrage and gaps in coverage, that hasn’t necessarily been followed through on.
Case in point is the Financial Industry Regulatory Authority’s (Finra) proposed Rule 2380. In its original form the rule would have limited the leverage broker/dealers could offer their customer in forex trading to 1.5-1. That is the customer would have to put up about $67,000 for a standard $100,000 forex position.
Regulation talk was all the rage at the Futures Industry Association’s annual expo in Chicago today. In his keynote address, Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler reiterated past talk about over the counter (OTC) derivatives clearing reform and CFTC-SEC harmonization. Exchange leaders also weighed in with thoughts about how some of the proposals coming down the pike could make the U.S. futures industry less competitive.
On the eve of the annual Futures Industry Association’s Futures and Options Expo there is a lot of activity and rumors floating around.
CME Group CEO Craig Donohue had a very relevant quote during today’s meetings on harmonization between the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC). Alluding to the differences between the securities and futures markets, Donohue said it was like “Greeks speaking Chinese to people who speak Portuguese.” Sorting out the regulatory overlaps between the CFTC and SEC and achieving the harmonization called for by President Obama’s regulatory blueprint is a complicated matter indeed. The two agencies must complete a report on harmonization by Sept. 30. Otherwise, the matter will be forwarded to the Financial Services Oversight Council. CFTC Commissioner Bart Chilton said he was optimistic that the two agencies could “solve their issues without ’Mom and Dad’ in the form of the Treasury Department stepping in.” Continue reading ‘CFTC-SEC: Hiccups to harmony?’ »
…Principles-based regulation, that is. The Options Clearing Corporation released testimony to be given by their Chairman and CEO Wayne Luthringshausen at a meeting tomorrow on the harmonization of the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC). In his testimony, Luthringshausen calls for “combining the functions of the SEC and CFTC under a new principles-based statute to ensure holistic oversight of all derivatives products.” The battle between the SEC’s rules-based approach and the CFTC’s principles-based approach to regulation has caused conflict in the industry for years.
