The need for this change in the documentation of contracts is driven by the fact that the banking regulators previously took a fundamentally punitive and economically unsound position with respect to the regulatory capital treatment of collateral for cleared derivatives. As the banking regulators stretch their regulatory authority into new types of transactions (e.g., cleared derivatives), the limits of their pre-existing regulatory expertise become clear.

Recently, the banking…

Given the resource limitations under the 2016 budget (see CFTC Chair Massad Criticizes Budget Deal (with Lofchie Comment)), the CFTC should conserve regulatory resources by ceasing to grant time-limited no-action relief from unnecessary rule requirements. It would be simpler to grant indefinite relief under the conditions specified in the letter, which seem sufficient to permit the CFTC to achieve its regulatory goals. By providing two years of relief to SEFs (…

It is difficult not to feel sympathy for Chair Massad. It is a tough budgetary situation. Considering the CFTC's enhanced responsibilities, the expansive rulemaking that has taken place over the last several years and the seeming lack of regard for the costs of implementing those rules, a zero budget increase is a serious problem.

The CFTC should consider scaling back on regulatory requirements that serve no material purpose. A good place to start is CFTC's double regulation of SEC-…

Kudos to the current Commissioners for doing a bit of clean-up. Hopefully, more of this to come.

As to the deletion of the requirement that pre-trade oral communications be traceable to a particular transaction, the release states (at page 7): the CFTC "noted that access to searchable pre-trade communications is an important element of its oversight of the derivatives market and enforcement of Commission rules and regulations. The Commission recognized, however, that keeping these…