In a public hearing, the House Agriculture Committee reviewed the CFTC’s 2012 agenda for investigating MF Global and implementing rules under the Dodd-Frank Act. CFTC Chairman Gary Gensler found himself under fire from Ag Committee members, who pressed the Chairman on the strength of various customer protections in light of the MF Global catastrophe. Thousands of customers have been unable to collect 30 percent of their funds after MF Global’s collapse. The financial giant was supposed to have held the funds in segregated accounts.
The Agriculture Committee questioned Gensler on the status of the rule making process. The CFTC has only finalized 28 rules, and has neglected to propose or finalize over 20 more that relate to the Dodd-Frank Act. In particular, the CFTC has not yet defined “swap” or “swap dealer,” making it nearly impossible for market participants to understand whether new rules and legislation applies to them. The Commission’s reluctance to define swaps and swap dealers have raised questions regarding the CFTC’s cost-benefit analysis of the rules, and an atmosphere of regulatory uncertainty.
“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, according to a press release issued by the Committee on Agriculture.
