CFTC swaps rules hurt liquidity, burdensome -groups
News Article
February 8, 2011
Wall Street banks and major energy companies urged the U.S. futures regulator to revise new rules meant to increase transparency in the vast swaps market, saying they will make hedging riskier and more costly. Firms registered their objections with the CFTC at the end of a public comment period on the rule, which governs the speed at which companies must report the details of swaps trades.
The companies argued the CFTC's proposal requiring swap trades to be reported "as soon as technologically practicable" could be detrimental to both buyers and sellers, who may need to protect that information long enough to offset their position with a hedge in the futures market, and that the rule could create potential "front running" and ultimately affect the depth and breadth of the market.
Cross References
Dodd-Frank Act, Title VII, Sec. 727; new CEA Sec. 2(a)(13); 17 CFR Part 43