CFTC Chair Massad Discusses "Fine-Tuning" CFTC Rules to Address Commercial End Users' Concerns

CFTC Chair Timothy Massad discussed the CFTC's efforts to address commercial end users' concerns at the 18th Annual National Energy Restructuring Conference.

CFTC Chair Massad reiterated the CFTC's intention to "fine-tune" its rules and touched on specific areas of concern that the CFTC will address. They include the following:

• making it easier for local utility companies to access the energy swaps market;
• granting relief from the real-time reporting requirements for certain less liquid, long-dated swap contracts;
• modifying the residual interest deadline;
• ensuring that end users can utilize the Congressional exemptions for clearing and swap trading if those end users enter into a swap through a treasury affiliate;
• clarifying when a contract with embedded volumetric optionality will be excluded from being considered a swap; and
• proposing rules to reduce reporting and recordkeeping requirements for trade options.

Additionally, Chair Massad explained that the CFTC continues to prioritize clearinghouse oversight and risk. He noted that cybersecurity concerns are intertwined with clearinghouse oversight, and that the CFTC is committed to incorporating solutions to such concerns into the CFTC's regulations and to focusing on cybersecurity in its examinations. Chair Massad stated that he expects the CFTC to propose a new rule regarding cyber protections, including measures that address control, penetration and vulnerability testing, later this year. He noted briefly that the biggest challenge facing the CFTC is an exiguous budget that limits its resources for overseeing an increasingly complex marketplace effectively.

See: CFTC Chair Massad's Remarks.
Related news: CFTC Approves Proposed Rulemaking Regarding Certain Reporting and Recordkeeping Requirements for End-Users (with Cadwalader Summary) (April 30, 2015).