Today, the House Agriculture Committee held a hearing to assess the progress of global derivatives reforms since the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law five years ago. Dodd-Frank imposed sweeping new regulations over the financial industry, including the regulation of swaps under Title VII, which had previously not been regulated in the U.S.
Ag Committee Presses CFTC Chair on MF Global & Dodd-Frank Rulemaking Process
Tamara Hinton, 202.225.0184
WASHINGTON – Today, the House Agriculture Committee held a public hearing to review the 2012 agenda of the Commodity Futures Trading Commission (CFTC) as the agency continues to investigate the collapse of MF Global and promulgate rules pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Members of the Committee pressed CFTC Chairman Gary Gensler on the strength of customer protections in place in light of the collapse of MF Global. Thousands of customers have yet to receive nearly 30 percent of the funds that MF Global should have held in segregated accounts.
Additionally, Members also questioned the status of the rulemaking process. Although the CFTC has finalized 28 rules, the agency has yet to propose or finalize more than 20 rules that relate to the Dodd-Frank Act. Some of these rules relate to defining "swap" or the entities such as "swap dealer" or "major swap participant." This lack of clarity and certainty regarding key definitions has made it difficult for market participants to understand the full impact of rules that have been finalized and raises questions about the CFTC's ability to consider the costs and benefits of each rule. It further creates regulatory uncertainty for businesses across the country.
"This is a critical time at the CFTC, involving many issues that are important to our constituents. Today, we had the opportunity to question the Chairman about MF Global, the customer funds that remain missing, and how the Commission will respond to enhance customer protections. We also continued to push the Chairman that new rules required by Dodd-Frank should not unnecessarily burden businesses or the economy with overly broad or cumbersome requirements. Making policy without regard for the economic consequences is a luxury we cannot afford even in the strongest economy," said Chairman Frank Lucas.
Written testimony provided by the witness is linked below.
The Honorable Gary Gensler, Chairman, Commodity Futures Trading Commission, Washington, D.C.