CFTC Chair Massad Discusses Clearing and Swaps Trading

CFTC Chair Timothy Massad spoke about clearing and swaps trading at the ISDA's 30th Annual General Meeting.

According to Chair Massad, derivatives markets have become "integral" to the growth of the global economy because they allow companies to manage risk effectively. Chair Massad reiterated that the CFTC plans to "fine-tune" rules in the months ahead to address commercial end users' concerns.

Chair Massad emphasized that clearinghouse oversight remains a top priority, and added that the CFTC plans to ensure that clearinghouses are able to rebound from cyber attacks. He also said that, in order to ensure clearinghouse resiliency, the CFTC has incorporated cybersecurity and other cyber concerns into its examination program to analyze whether private companies are conducting adequate tests of cyber protections.

Chair Massad also discussed recent efforts to create an effective swaps trading framework. He highlighted the ways in which the CFTC intends to address operational issues, such as reporting workflow for cleared swaps - an issue that he outlined recently in a previous speech. However, he said, he has not found any "compelling justification" for the concerns surrounding post-trade anonymity, and noted that the CFTC is expected to have "more to say on this in the future." In a separate statement, CFTC Commissioner Bowen commended Chair Massad for addressing the lack of justification for certain concerns about post-trade anonymity on SEFs.

Chair Massad also mentioned recent CFTC guidance, which pertains to capital that must be held by SEFs, that aims to clarify the calculation of projected operating expenses. Specifically, the guidance makes clear that the variable commissions that SEFs might pay their employee-brokers do not have to be included in an SEF's calculation of projected operating costs. Regarding the made-available-to-trade determination process, Chair Massad announced that he has directed his staff to convene a public roundtable to obtain views and comments on the current framework.

See: Chair Massad's Remarks.
See also: Commissioner Bowen's Statement.
Related news: CFTC Chair Massad Discusses Swaps Market Framework (with Lofchie Comment) (April 22, 2015).