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CFTC Acts To Help Prevent Another Financial Crisis


The Commodity Futures Trading Commission today adopted two proposed rules establishing phased-in effective dates for financial reforms.  The rules relate to documentation, margining, mandatory clearing and trading.  The rules are expected to be finalized in the coming month and their future effective dates will vary based on the category of market participant.

Dennis Kelleher, president and CEO of Better Markets, made the following comments on the proposed rules:

In phasing in the rules, the CFTC seeks to strike a balance between the urgent and overdue need to protect the public and an appropriate time period for companies to adjust.  It must never be forgotten that the public has been waiting for three years for protection from reckless and predatory conduct, which culminated in the devastating financial meltdown of 2008.  While the public still suffers from the ongoing economic consequences of the last financial crisis and still waits for protections to prevent the next one, the CFTC is providing generous time periods for the private sector to implement critical reforms.

Too many private companies have been fighting almost nonstop since the financial crisis in 2008 to prevent or water down those protections, but many have also been preparing for the new rules.  Now is the time to stop fighting the rules and get to work, put the rules in place and get on with the business of reform.

Companies should have little trouble competing in a new framework within the proposed time periods.  It must be remembered that they will not be starting from scratch on the dates rules are finalized, adopted and effective in the future.   Private companies have made it clear, at CFTC roundtable discussions and elsewhere that they have been working diligently in anticipation of these new rules for many months, if not years. 

Many firms have spoken publicly, including at those CFTC roundtables, about the need to put such rules in place as soon as possible on specific dates to eliminate uncertainty.  The rules proposed today meet those private sector requests for an appropriate phase-in and certainty, while providing a framework to protect the American public from having to bailout financial firms again.

Any attempt to delay or water down the proposed already generous phase-in timeframe should be rejected as no more than an unjustifiable delay tactic.  American taxpayers cannot wait any more for safeguards to be put into place to ensure that another financial crisis doesn’t happen again.

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