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RELEASE: Better Markets Commends CFTC's Steps to Reduce the Dangerous Anti-Competitive Practices by Wall Street's Derivatives Dealer Club

FOR IMMEDIATE RELEASE
Tuesday, March 3, 2020
Contact: 202-618-6433, press@bettermarkets.com

Washington, D.C.  –  Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement regarding the Commodity Futures Trading Commission’s (CFTC) proposed prohibition of an anti-competitive and anti-market trading practice, called post-trade name give-up:

“The four biggest Wall Street banks are also the largest derivatives dealers in the world, controlling almost 90% of $200 trillion US derivatives markets and much of the $640 trillion global markets.  They use this dangerous concentration and market power to kill competition and rig the markets for their benefit.  Because derivatives were at the core of causing and spreading the 2008 financial crash, the 2010 financial reform law had numerous provisions to break up this oligopoly, enable competition, stabilize the markets and protect other market participants.

“We commend the CFTC for proposing a rule to do just that and end one of the most anti-competitive and anti-market trading practices, called Post-Trade Name Give-Up (PTNGU), by Wall Street’s biggest dealer banks, as we detailed in our comment letter supporting the CFTC’s proposal.  

“Currently, those four banks use their market power generally and PTNGU in particular to control access to trading on swap execution facilities (SEFs) and influence other commercial practices in the markets.  The commercial stranglehold these four dealer banks and their affiliates have on SEFs competing for their liquidity damages everyone else in those markets. 

“In recent years, the largest Wall Street dealers have managed to extract trading controls, privileges, and advantages denied to other market participants, which is unfair, contrary to the market structure reforms in the Dodd-Frank Act, and detrimental to liquidity formation.  The ultimate result is that the profits of these dealers are passed as increased costs onto end-users of the markets—like the funds Americans use to save for retirement—the very firms the derivatives markets are supposed to serve.

“The CFTC must be commended for standing up for Main Street families on this issue, in the face of enormous pressure from the derivatives dealers and their Washington allies, which have visited the CFTC in droves and attempted to use every tactic, including reportedly the intimidation of their own clients, to kill this necessary and overdue reform.  The CFTC must now swiftly finalize this prohibition.”

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.

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