Comments on: COLUMN – U.S. futures industry risks Pyrrhic victory in battle with CFTC: Kemp http://blogs.reuters.com/financial-regulatory-forum/2010/03/22/column-u-s-futures-industry-risks-pyrrhic-victory-in-battle-with-cftc-kemp/ Mon, 31 Oct 2016 15:40:16 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: JKEMP http://blogs.reuters.com/financial-regulatory-forum/2010/03/22/column-u-s-futures-industry-risks-pyrrhic-victory-in-battle-with-cftc-kemp/comment-page-1/#comment-690 Fri, 26 Mar 2010 17:06:16 +0000 http://blogs.reuters.com/financial-regulatory-forum/?p=6953#comment-690 @BrianR
Thanks for the comment. You are absolutely correct on the specifics, but I think the larger context is more important here.
While it is true FIA has asked the CFTC to delay its action pending legislation, FIA has also stated that it “agrees with some and disagrees with many of the statutory changes in the House bill’s Section 3113″ (page 13 of the comment letter).
From the various objections contained in the comment letter, and the rather limited suggestions for “reform” that it does countenance, the real purpose seems to be to postpone reform or enmesh the CFTC in litigation in the hope the whole thing will go away and leave the status quo in place.
It is not clear to me that that strategy will work or is reasonable. My reading of the congressional process is that reform *is* coming. The industry would do better to work with the grain here and try to shape reforms in a constructive manner than oppose them wholesale and then get steam-rollered by lawmakers.
Gensler and the CFTC have been holding out an olive branch here with limits set a very high level (at least for the more liquid markets such as oil and gas). The industry needs to engage constructively, not simply try to derail the process. The alternatives could be much worse.

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By: BrianR http://blogs.reuters.com/financial-regulatory-forum/2010/03/22/column-u-s-futures-industry-risks-pyrrhic-victory-in-battle-with-cftc-kemp/comment-page-1/#comment-673 Tue, 23 Mar 2010 21:21:21 +0000 http://blogs.reuters.com/financial-regulatory-forum/?p=6953#comment-673 Actually, as the FIA notes, before it can act, the CFTC has an affirmative statutory obligation to make a finding that its specific proposal is “necessary” to “prevent” excessive speculation. Also, the FIA is simply requesting the CFTC to defer action for a few months until it has the new OTC authority it will receive from Congress this year. If the CFTC goes forward with the current scope of its proposal, inevitably much business will leave the U.S. and flow, well, to London.

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