Posts tagged ‘regulation’
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.
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’ »
A couple of weeks ago I went down to Key Biscayne, Florida for the Managed Funds Association (MFA) conference. To be more precise, I went down to Florida to meet with and interview several commodity trading advisors who managed to earn positive returns in a difficult year.
Back in March we wrote about the report “Sold Out: How Wall Street and Washington Betrayed America,” published by Essential Information and the Consumer Education Foundation. The report stated that $5 billion in political influence purchasing in Washington over the past decade had led to our current economic collapse.
The report was anything but shocking as the influence of big money on public policy is no secret. Many depression era reforms were struck down in the past decade, which allowed among other things the merger of commercial and investment banking and an increase in the amount of leverage financial institutions could utilize.
CFTC Chairman Gary Gensler kicked off the new year by outlining his goals for regulatory reform in a speech before the Council on Foreign Relations today. In it, Gensler blamed over the counter (OTC) derivatives for much of the financial crisis of 2008. “I believe that over the counter derivatives were at the heart of the crisis. We have all witnessed firsthand the effects that unregulated derivatives had across the entire economy,” he said. Continue reading ‘Demonizing derivatives’ »
Did you hear? Citigroup is paying back its $20 billion in TARP money! But as this New York Times editorial points out, big banks’ motives for paying back the government are (surprise, surprise) less than pure; namely, the banks want to get out from under the pay caps and restraints of the bailout. As the Times says:
“The Treasury Department, which seems to have no qualms about Citigroup’s self-proclaimed strength, plans to sell its $25 billion stake over the next six to 12 months… The Treasury Department’s approval is a grim reminder of the political power of the banks, even as the economy they did so much to damage continues to struggle.” Continue reading ‘Big banks’ fog follies’ »
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.
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.
