Energy Metro Desk Article "Drums along the Potomac" Discusses O'Malia's Thoughts on CFTC Issues and New Faces at the Agency

In its "Drums Along the Potomac," series, Energy Metro Desk discusses comments by Commissioner O'Malia about keeping markets efficient. Commissioner O'Malia, who is departing the CFTC, recently announced that he will become the CEO and Director of ISDA.

In the article, Energy Metro Desk asked Commissioner O'Malia if the CFTC will take a position of supporting growth or hindering it. Commissioner O'Malia responded by saying that poorly crafted policy on issues from position limits to swaps and the cross-border framework can hinder market growth. He explained that the CFTC must ensure that end users can continue to "access markets cost-effectively and easily." Commissioner O'Malia cautioned that regulations need to avoid hitting companies that try to mitigate risk through clearing "with the owner/swap dealer tag, [so] that these transactions should not count towards your de minimus level."

Commissioner O'Malia explained that he wants markets to function "unencumbered by unnecessary regulatory friction." In order to keep markets efficient, Commissioner O'Malia recommended that policy should not be based on unlikely or extreme outcomes, for this creates "perverse outcomes in the functioning of the day-to-day market."

Additionally, the article discusses new staff at the CFTC, noting that it has been a long time since such a "big class of Hill folks" have moved over to "agency-land" at one time. The article states that the "more new Hill folks there are on the majority side at an agency like the CFTC, the smoother the policy machine will move."

Click here to view the article. The above link is to an excerpt from the most recent issue of Energy Metro Desk, which is published biweekly by Scudder Publishing Group, an energy trade news publishing company based in the Washington, D.C. metropolitan area. Those interested in learning more about the Energy Metro Desk may do so by linking to www.energymetro.com or e-mailing [email protected]. Reprinted with permission of the publisher, Scudder Publishing Group, LLC. Copyright 2014.

See also: Scott O'Malia Appointed as CEO of ISDA (July 23, 2014); CFTC Commissioner O'Malia to Leave CFTC (with Lofchie Comment) (July 21, 2014).