Derivatives Reform: Preparing for Change

CFTC Speeches

CFTC Commissioner Scott O'Malia discusses implementation of Dodd-Frank observing that the , the Commission has issued so far r four Advance Notices of Proposed Rulemaking, 33 Notices of Proposed Rulemaking, two interim rules, one order, one notice, and two requests for comment pursuant to the Dodd-Frank Act, equating to 732 Federal Register pages. He expresses concerns about the cost of clearing and warns that "we are concentrating market risk in clearinghouses to mitigate risk in other parts of the financial system."

O'Malia also criticizes a proposal to a new margining regime entailing individual customer segregated accounts that he cautions "will increase costs to the customer and create moral hazard by reducing the incentive of futures commission merchants to appropriately identify and manage customer risk." He also opines that the schedule set by Congress for the Commission to implement the Dodd-Frank Act is "unrealistic."

Document Number

CFTC PR 5969-11

Date

January 25, 2011

Cross References (links may require a Cabinet subscription)

Dodd-Frank Act, Title VII