CFTC Commissioner O'Malia Speech - Developing Technology Solutions to Protect Segregated Customer Funds

In Commissioner Scott O'Malia's opening statement before the Technology Advisory Committee, he argued that the reforms currently under consideration fail to close the existing regulatory gap that allows firms to self-report the status, balance and location of the customer funds. O'Malia went on to note that the industry must develop a fully automated technology solution that can verify customer balances held by the FCM, custodial banks and the clearing house. [SL Comment: As an ardent opponent of Dodd-Frank, I note again the irony that FCMs were put forward as a better alternative to tri-party custody for swaps. In fact, many customers would be far better protected by the pre-Dodd-Frank regime of tri-party rather than being forced to hold collateral at an FCM.]

View press release in full here(links externally to CFTC website).