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.
Futures are derivatives traded on exchanges and guaranteed at clearinghouses such as those owned by CME Group Inc. and Intercontinental Exchange Inc. Until Dodd-Frank was enacted in 2010, swaps were largely unregulated, often uncleared and traded directly between banks and other consumers of derivatives. Dodd-Frank requires traders including Goldman Sachs and JPMorgan Chase & Co. to have most swaps cleared and traded on exchanges or swap execution facilities.