CFTC to Host Public Roundtable Regarding MAT Process (with Lofchie Comment)

The CFTC Division of Market Oversight announced that it will hold a public roundtable on July 15, 2015 to discuss the CEA's trade execution requirement and the process of reaching made-available-to-trade ("MAT") determinations.

Specifically, the roundtable will discuss (i) approaches to mandatory exchange trading in certain jurisdictions, (ii) academic perspectives on, and data-based assessment of, MAT and (iii) industry analyses of the MAT process.

Lofchie Comment: Holding the roundtable seems to be a reaction to Commissioner Giancarlo's White Paper on the CFTC Swaps Trading Rules. It is particularly noteworthy that Commissioner Giancarlo's critique of the existing swaps trading rules starts from his position as a supporter of the Dodd-Frank legislation. The Commissioner believes that the CFTC's rulemaking failed at implementing the legislation's intent. That the Commissioner makes his argument in favor of Dodd-Frank rather than against it makes his point more compelling simply because the changes for which he advocates cannot be dismissed as requiring Congressional action. The Commissioner lays out his proposal for an alternative form of swaps market regulation in Section V of the White Paper (beginning on page 63). The gist of the Commissioner's proposal is this: swaps markets should register with and be regulated by the CFTC, but should be allowed to operate (and evolve) largely according to whatever rules and structures are determined by competition and market forces. This approach to regulation is likely to be opposed by those who benefit most from a regulated market where the CFTC dictates the rules that all swaps markets must adopt. Political battles can be lost as easily as economic ones. Rules that are adopted under regulatory commands are likely to prove far more rigid than those adopted in response to market demands.

See: CFTC Press Release.