CFTC Chair Massad and ISDA CEO O'Malia Discuss SEF Policy (Energy Metro Desk)

In the latest installment of the Energy Metro Desk series "Drums along the Potomac," editor-in-chief John Sodergreen discussed swap execution facilities ("SEFs") and general swaps policy, citing comments from CFTC Chair Tim Massad and former CFTC Commissioner and now ISDA CEO Scott O'Malia.

According to Sodergreen, the recent SEFCON V conference on SEF policy made it seem as though "SEFs, as a class, had largely failed." The article cites comments from CFTC Chair Massad at the conference, who stated that much work needs to be done regarding SEFs. In his speech, Chair Massad outlined three principles guiding his approach to current issues concerning regulated platforms, which Sodergreen summarized: (i) the CFTC's duty is to implement the law, (ii) market development takes time, and (iii) markets don't develop simply as a result of government directives.

Sodergreen also cited commentary regarding Chair Massad's remarks from Cadwalader attorney Steve Lofchie, who noted that not all of the "damage done to the markets can be blamed on the hurried legislation of the statute; some of it must be ascribed to the rulemaking that was nearly as hasty."

Additionally, Sodergreen spoke with former CFTC Commissioner O'Malia about SEF issues. Mr. O'Malia expressed concern that the conflict over cross-border rules is "both hurting liquidity in the U.S. and fracturing it elsewhere," stating that SEFs are suffering as a result of this. According to Mr. O'Malia, "[a] lot of things" will be worked out once the cross-border issues are settled.

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 who are interested in learning more about Energy Metro Desk may do so by visiting www.energymetro.com or sending an e-mail to [email protected]. Reprinted with permission of the publisher, Scudder Publishing Group, LLC. Copyright 2014.

Related news: CFTC Commissioners Discuss and Differ on CFTC's Swaps Trading Rules (with Lofchie Comment) (November 12, 2014).