Big Banks Look to Reverse New CFTC Rules

According to the New York Post, several of the US’s largest banks plan to sue the Commodity Futures Trading Commission (CFTC) over some of the new rules it has been implementing.

The banks are looking to get many of the new rules reversed through the law suit, citing that the CFTC violated rulemaking procedures while implementing them. They claim that the CFTC rushed many of the laws, passing them before the banks were given proper time to review and comment on them.

The banks are concerned that the passing of these laws — requiring all overseas trades that are even slightly involved with US markets to be cleared by both foreign and US regulators– will adversely affect liquidity in the market, as well as raise costs and create redundancy within regulation.

Many feel that the CFTC has not weighed the actual benefits to the industry these new rules would create against their cost, going as far to say that CFTC chairman Gary Gensler forced these rules through merely to get one more shot in on the banks before he steps down.

The lawsuit is expected to be filed very soon, as many of these rules are due to go into effect before next year.