There are two aspects of the disciplinary action and Commissioner Chilton's statement of support that are problematic.

First, in the middle of the Order, the Commission inserted a long digression under which it explained why its rules regarding risk management under Dodd-Frank are such a positive development, and, had they been in force earlier, might have prevented JPM's losses.

As a general matter, this digression within a disciplinary action seems inappropriate. It raises…

NFA Form PR is significantly less onerous than NFA Form PQR, the quarterly reporting form for CPOs. While NFA Form PR contains certain additional questions not included in CFTC Form CTA-PR, with respect to a CTA's key relationships and trading program information, the Form contains important exclusions from the requirement for a CTA to provide rate of return and AUM information for various trading programs, including those for Rule 4.7 funds. While firms that also function as CPOs generally…

The discussion of the various reasons that the rule would seem unlikely to be successful begins on page 17 of the GAO report. Reading this discussion should give one pause as to whether this rule is worthwhile, however well-intentioned it may be. Query: Could the money spent on complying with the rule be devoted to the cause in a manner better suited to achieving the worthy goal yet consistent with the amount of expense and effort?

This is a positive regulatory development in that it eliminates the need for individual options exchanges to prepare their own versions of an "options disclosure document" and to obtain their own no-action letters, processes that were relatively expensive and that did not seem to provide any meaningful benefit to investors. It is unlikely that institutional investors read the options disclosure documents or appreciated being protected from investing in certain options markets. All U.S.…