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CFTC says rule deadlines 'might slip'

Thursday 17 March 2011 - by Will Henley

The US Commodity Futures Trading Commission admitted yesterday that it might miss July deadlines imposed on it by the Dodd Frank Act.

Gary Gensler, the chairman of the futures regulator, said that proposals on capital and margin, product definitions and the Volcker rule "might slip" and not be completed by April.

Others he said may take until "early fall".

Addressing a Futures Industry Association conference in Florida via videolink, Gensler said that the CFTC would instead use flexibility in phasing in rules.

"We are human and we might slip," he said, as he described how the agency is dividing rulemaking into three clusters - early, middle and late.


"Implementation dates may be conditioned upon other rules being finalised."

"There are some rules that, because we proposed them only within the last month or two or because we have yet to propose them, likely will be considered later," he added.

The announcement comes a month after FIA president John Damgard called for a more "measured" approach to Dodd Frank derivatives rulemaking.

Phased implementation will be assessed according to criteria such as asset class, type of market participant and whether a requirement would apply to market platforms, Gensler said.

The first rules enacted are set to include an entity definitions rule and associated swap dealer and major swap participant registration requirements. They could also include a final rule on the end-user exception for clearing.

"These are important rules that many market participants have indicated they hope we consider early," Gensler said.

They will likely be followed by rules on mandatory clearing and surveillance and position limits, as well as whistle blowing and anti-manipulation.

Rules on product definitions, disruptive trading practices, capital and margin requirements, and supervision and testing requirements are set to come in the last wave of rulemakings.

"Amongst the late rules, we may consider finalising the joint rule with the SEC regarding reporting requirements for investment advisors as well as our similar rule on commodity pool operators.

"Rules in the late group probably will not be considered until the late summer and early fall," he admitted.

The chairman also revealed that the CFTC has received some 2,900 pre-rulemaking submissions to date and officials have held more than 600 meetings with members of the public.

Next week Gensler travels to Brussels to talk with European parliamentarians about harmonisation of the swaps oversight.

View Gensler's videolink message below:


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