U.S. Commodity Futures Trading Commission rules will face criticism at a congressional hearing from segments of the derivatives industry for helping exchange-traded futures and hurting over-the-counter swaps.
GFI Group Inc., a New York-based interdealer broker, and a coalition of trading platforms including one operated by Bloomberg LP told a U.S. House Financial Services subcommittee in written testimony for a hearing today that CFTC rules threaten the viability of the swaps market. The companies say futures face fewer customer protections and less stringent margin rules.
"After nearly 2 1/2 years of rulemaking, the CFTC's cumulative approach to swaps regulation has imposed such high costs on the industry that the U.S. swaps market is on the verge of becoming too costly and too regulated (particularly as compared with futures) to be a viable means for end user to hedge and manage their financing risk," the Companies Supporting Competitive Derivatives Markets said in testimony.
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