Financial Regulatory Forum

ANALYSIS-CFTC speculation limits may pass quietly, unchanged

U.S. Commodity Futures Trading Commission Chairman Gary GenslerBy Christopher Doering

WASHINGTON, Dec 17 (Reuters) – New U.S. rules to limit speculation in commodity markets could move forward quickly, and with few alterations, after objections by the measure’s most vocal supporter unexpectedly delayed a key vote.

Gary Gensler, head of the U.S. Commodity Futures Trading Commission, abruptly postponed a vote on Thursday to open proposed new position limits to public comment, evidence of mounting pressures internally as the agency implements dozens of rules meant to make markets safer and more transparent.

The agency must carefully balance the laws it is required to implement as part of the sweeping Dodd-Frank financial overhaul with the opinions of its five commissioners, who disagree on how they should get there.

Gensler has managed to maneuver around the two Republican commissioners who have several times voted against releasing new rules, concerned they could damage the market. This week he pushed forward with a plan to set up special exchanges to trade swaps after delaying a vote last week due to objections.

He faced concerns from the opposite corner on Thursday — Bart Chilton, a Democrat and most ardent supporter of limits, who argued that the two-part approach would leave markets unprotected from rampant speculation for too long.

from Tales from the Trail:

Think brussels sprouts and cauliflower are agricultural commodities? Think again.

While the financial bailouts tossed to automakers, banks and other groups during the recent economic crisis left a funny taste in the mouth of some Americans, one former U.S. regulator hopes efforts to prevent another panic doesn't go rotten.

The U.S. Commodity Futures Trading Commission is immersed in drafting dozens of rules to assist it in increasing oversight of the once opaque over-the-counter derivatives market, widely blamed for exacerbating the recent financial crisis. USA/

Among the rules it must craft is what the definition of an agricultural commodity is? Of course, corn, cotton, soybeans and livestock, among other items, fall into this realm.

Once skeptical, U.S. Congress warms to CFTC’s Gensler

By Christopher Doering

WASHINGTON, March 19 (Reuters) – Gary Gensler, who once supported market deregulation blamed for the recent financial meltdown, has been winning over members of Congress who had been skeptical of his ability to rein in Wall Street as the top U.S. futures regulator.

A former partner at Goldman Sachs, Gensler has quickly become a go-to guy for Congress as it navigates a sea of complex proposals to regulate the $300 trillion swaps market.

The biggest test of his influence as chairman of the Commodity Futures Trading Commission will occur next week when key Senate committees hash out landmark derivatives reforms that will go a long way toward steering the future of financial reform in Washington.

New OTC swaps rules must apply to all – U.S. regulatory official

WASHINGTON, March 2 (Reuters) – Congress should not create blanket exemptions for end users from new rules designed to make trading of the over-the-counter derivatives more transparent, a commissioner on the top U.S. futures regulator said on Tuesday.

Michael Dunn said the Commodity Futures Trading Commission should be given the authority to exempt end users from requirements to trade and clear standardized derivatives on a case-by-case basis, but recommended against a broader exemption currently being considered by Senate committees.

“Allowing such a large class of transactions to be exempt from clearing would mean that dealers would have more risk on their books. If these dealers fail, this risk could affect the entire financial system,” Dunn said in remarks prepared for a National Futures Association regulatory seminar in Chicago.

U.S. market regulators eye clearinghouse governance – CFTC’s Gensler

By Christopher Doering

WASHINGTON, March 1 (Reuters) – Congress should give U.S. securities and futures regulators the authority to ensure clearinghouses are protected against conflicts of interest, the chairman of the Commodity Futures Trading Commission said on Monday.

Gary Gensler outlined his vision for clearinghouses as two U.S. Senate committees work to finalize financial regulatory reform bills that will include new oversight for over-the-counter derivatives.

“Open governance would ensure that clearinghouses are not governed by parties that might have a conflict of interest or financial stake in particular transactions,” Gensler said in remarks prepared for the Institute of International Bankers.

U.S. regulator CFTC proposes enforcing limits on energy trades

By Ayesha Rascoe and Tom Doggett

WASHINGTON, Jan 14 (Reuters) – The top U.S. futures market regulator on Thursday moved to limit the role of big traders in once high-flying energy markets, unveiling proposals to put a hard cap on the size of positions that dealers can hold but offering a limited exemption for big financial hedgers.

The long-awaited proposals, part of the Obama

administration’s push to overhaul financial markets, will apply to the four most-traded energy contracts on the two major exchanges, the New York Mercantile Exchange and the IntercontinentalExchange.

But it remains to be seen if the limits — which the Commodity Futures Trading Commision said would affect only the 10 biggest position holders if implemented today — are sufficient to satisfy lawmakers who have clamored for regulatory action since oil prices surged to a record $147 in 2008.

U.S. Senate agriculture panel head plans own US swaps reform bill

Senator Blanche Lincoln (D-AR) (C) speaks about the 2007 budget in a news conference at the Capitol in Washington, February 9, 2006. Also pictured are Senate Majority Leader Harry Reid (D-NV) (L) and Senator Kent Conrad (D-ND).   REUTERS/Jonathan Ernst WASHINGTON, Nov 18 (Reuters) – The U.S. Senate Agriculture Committee chairman said on Wednesday she intends to draft legislation “that will bring much-needed transparency and accountability to the over-the-counter derivatives market.”

(more…)

Proposed U.S. risk regulator overlaps SEC, CFTC – futures regulator Gensler

WASHINGTON, Nov 17 (Reuters) – A proposed super-regulator for the U.S. financial system could result in overlapping overseers of the securities and futures exchanges, said the chief futures regulator on Tuesday.
(more…)

U.S. commodities regulator says not convinced wheat convergence problem is solved

By Christopher Doering
WASHINGTON, Oct 29 (Reuters) – The head of the top U.S. futures regulator said on Thursday he doesn’t believe the world’s largest exchange has figured out the root cause behind the lack of convergence in the Chicago wheat market.

(more…)

CFTC’s Gensler wants U.S. swaps bills to have more clearing, exchange requirements

By Jonathan Spicer
CHICAGO, Oct 21 (Reuters) – The U.S. commodities regulator’s chief said he would work with lawmakers to toughen new derivatives rules recently approved by two congressional groups, signaling he wants more products run through exchanges and clearinghouses, and few companies exempted from clearing.
(more…)

  •