The SEC's new "practice" (or hopefully it will become a practice) of testing rule changes through pilots is a positive development as an approach to regulation. The pilots must themselves be carefully selected. The notion of testing Transaction Fees seems a much better idea than the SEC's prior major test of , which seemed highly unlikely to produce any meaningful results.

The real question is not whether the CCPs can survive; the real question continues to be whether they can survive without bringing down their participants. The regulators need to expand their analysis to consider the risk that when the CCPs are in trouble, they will demand more capital and collateral from their participants, thereby sucking liquidity out of the system, and forcing a further selldown of the market as CCP participants liquidate customer and proprietary positions.

While legislators and regulators commonly bemoan the size of financial firms and decry "too big to fail," they simultaneously adopt regulatory requirements that impose significant fixed costs. This is true not only as to CFTC regulation, but also as to banking and securities regulation. The CFTC under Chairman Gensler was particularly "aggressive," imposing numerous rules that raised costs and reduced profit opportunities. At the time, Mr. Gensler assured the public and Congress that the .…

This is quite a significant settlement for a variety of reasons. First, it is possible that the "Active Share" information will provide useful investment information, though it is not certain that this is the case. The Report very strongly suggests that investors would generally be better served by investing in passively managed funds with lower expenses than in actively managed funds. It is implicit that the authors of the Report believe that the disclosure of the Active Share information…