CFTC to Lower Threshold for Trading
The CFTC unveiled a plan on Thursday that would lower the threshold for traders in agricultural swaps. Existing regulations hold agricultural swaps to a tougher standard than the rest of the over-the-counter derivatives market. The commission proposed to reconcile the difference, as part of the Dodd-Frank financial overhaul law.
Under the agency's proposed rules, agricultural swaps traders would only need a $1 million net worth. Traders previously had to have $10 million to qualify. The lower threshold will allow smaller farmers - and other buyers and sellers of corn, wheat and the like - to hedge against wild fluctuations in prices.
Publication
NY Times blog
Date
January 20, 2011
Cross References (links may require a Cabinet subscription)
Dodd-Frank Act, Title VII, Sec. 723