Statements for the record on each rule:
Disruptive Trading Practices Interpretive Order
I support the proposed interpretive order regarding disruptive practices on designated contract markets or swap execution facilities. Congress expressly prohibited three trading practices that it deemed were disruptive of fair and equitable trading. Today’s order provides additional guidance to market participants and the public on the trading, practices and conduct that violate these statutory provisions. The order also addresses comments received by the Commission at the December 2nd roundtable and in response to the Advanced Notice of Proposed Rulemaking on disruptive trading practices. The order addresses the comments by clarifying how the Commission will interpret and implement the provisions of Section 747. I look forward to hearing from the public in response to this proposed interpretive order. The comment letters and staff roundtable were extremely helpful in formulating this proposed order.
Conforming amendments to Part 4 of Commission Regulations regarding commodity pool operators and commodity trading advisors
I support the proposed rule that will amend certain provisions of Part 4 of the Commission’s regulations regarding the operations and activities of commodity pool operators (CPOs) and commodity trading advisors (CTAs). The proposed amendments would ensure that CFTC regulations with regard to CPOs and CTAs reflect changes made to the Commodity Exchange Act by the Dodd-Frank Act. Consistent with the Dodd-Frank Act revisions to the definitions of CPOs and CTAs to include pools involved in swaps and advising on swaps, the proposed amendments will enhance current customer protections by increasing the transparency of swap activities by CPOs and CTAs to their pool participants and clients. The proposed rule would require that this information be included in the disclosure, reporting and recordkeeping scheme that currently exists for CPOs and CTAs under Part 4.
Conforming amendments to Part 3 of Commission Regulations regarding registration of intermediaries
I support the proposed rulemaking that will amend certain provisions of Part 3 of the Commission’s regulations regarding the registration of intermediaries. The proposed amendments are necessary to conform existing regulations to the new requirements in the Dodd-Frank Act. The proposed rulemaking would amend Part 3 to ensure that the registration process applies to new categories of registrants, such as swap dealers and major swap participants. The proposed amendments also will modernize existing provisions that will apply to all Commission registrants.
Requirements for prompt and efficient processing for clearing and for the transfer of customer positions
I support the proposed rulemaking regarding straight-though processing because it furthers the goal of expanding access to and strengthening the financial integrity of the swap markets. These proposed regulations would require and establish uniform standards for prompt processing, submission and acceptance for clearing of swaps eligible for clearing. Such uniform standards, similar to the practices in the futures markets, lower risk because they allow market participants to get the prompt benefit of clearing rather than having to first enter into a bilateral transaction that would subsequently be moved into a clearinghouse.
In addition, I support the requirement for prompt and efficient transfer of customer positions from a carrying clearing member of a clearinghouse to another clearing member of the clearinghouse, upon a customer’s request. This would promote efficiency and avoid unnecessary delay and market disruption. Furthermore, users of derivatives could get the benefit of greater competition amongst clearing members.
