CFTC Commissioner Chilton Statement on Speeding Dodd-Frank Implementation and Compliance
CFTC Commissioner Chilton made a speech reviewing and addressing the final implementation phases of the Dodd-Frank Act. Commissioner Chilton discussed his ideas as to how the process can move forward quickly, responsibly and effectively in implementing financial market reform. Specifically, he suggests the following two points:
- Compliance with Dodd-Frank rules should be required by those that have requested guidance or relief when individual, reasonable requests for clarification or other relief have been addressed sufficiently, which could happen in the next few days, or it could take longer depending upon the issue.
- It would not be appropriate, reasonable, or responsible for the Commission to proceed against an entity for non-compliance with a Dodd-Frank rule unless and until the entity has received a response from the CFTC to an existing request. (In this regard, he notes that the CFTC is considering a couple of hundred interpretative requests on approximately "three dozen discrete issues.")
Lofchie Comment: In last week's news, we reported on a speech of Commissioner Chilton in which he essentially criticized non-US regulators for failing to move quickly enough on the implementation of financial regulation and indicated that the CFTC should move "fast, fast, fast" to get its rules up and going. I think he is underestimating the difficulty that regulated entities (as well as "unregulated" swap participants) are having in interpreting the rules and developing compliance procedures. If market participants were confident that the CFTC could actually respond to interpretative questions, I would guess that it would receive thousands of questions, not merely hundreds. In any case, it will be interesting to see how much trading activity simply comes to a stop if the CFTC declares its rule to be effective without some further material delay.
View statement in full here (links externally to CFTC website).