CFTC’s O’Malia Criticizes ‘Mad Rush’ On Swaps Rules

Commissioner cites inconsistency in some regulations; says agency should release guidelines for implementation.

The U.S. Commodity Futures Trading Commission is overreaching in its Dodd-Frank Act rulemaking, undermining efforts to provide certainty to the swaps market, according to Scott O’Malia, a Republican commissioner.

The CFTC has taken shortcuts and reached inconsistent outcomes on regulations including those for market-information databases and the international reach of the new rules, O’Malia said in remarks prepared for delivery today at the University of Notre Dame Business Law Forum in Indiana. The agency should release guidelines for implementing the rules, he said.

Inconsistent Outcomes

The CFTC has reached inconsistent outcomes in the process for registering swap data repositories because agency employees have adjusted rules after they have been approved by commissioners, O’Malia said. Employees have shifted and sped up requirements for how quickly data must be reported to the public, according to a letter from CME Group Inc. to the agency.

Confused Objective

“This rule couldn’t do more to confuse the objective of coordinated global oversight,” O’Malia said. The CFTC should re-draft the regulation and release it as a formal rule proposal instead of interpretive guidance, he said.

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