November 30, 2010
post contributed by Megan Flynn
Tom Sexton broached the daunting topic of derivative regulation at our November event last Thursday. His calm composure contrasted with the strong concerns he shared with members regarding the impending regulation and the "changes of seismic proportions" it will bring to the market. The presentation made by Sexton was clean and full of extremely useful talking points. Sexton pointed out interesting details of the massive legislation and exposed many minute details that have the potential to completely change the way the derivatives market has functioned in the past.
Sexton mentioned the U.S Commodity Futures Trading Commission and its website, which is a good source of information regarding the impending regulation of derivatives. A statement on the website made by the CFTC Chairman Gary Gensler states, “The Wall Street reform bill will – for the first time – bring comprehensive regulation to the swaps marketplace. Swap dealers will be subject to robust oversight. Standardized derivatives will be required to trade on open platforms and be submitted for clearing to central counterparties. The Commission looks forward to implementing the Dodd-Frank bill to lower risk, promote transparency and protect the American public.”
The CFTC is currently maintaining a system on their website for effected parties in the industry to comment on the legislation. Sexton shared his concerns regarding the aggressive timeframes set by congress, and urged everyone to contribute comments regarding particular aspects of the Dodd-Frank Act before July. Although it has been mentioned that comments and edits may be made after the regulation goes into effect, the time to put the effort into shaping these regulations is now, Sexton said. Just because there is a caveat allowing changes after implementation, the regulation will be in effect and expected to be adhered to until that change can be potentially be made.