At the Office of the Chief Economist’s Conference on Commodity Markets, CFTC Chairman Gary Gensler announced that the Commission would be proposing two phased implementation timelines for new swap transaction regulations proposed under the Dodd-Frank Act. Gensler said that the “these proposed rules are designed to smooth the transition from an unregulated market structure to a safer market structure.”
This would be a boon to skittish market participants, hitherto unsettled by the unsteady pace of commodity futures swaps reform. Only eleven of the dozens of rules called for under Dodd-Frank were finalized in time for the July 16th deadline, leading the Commission to pass an extension for unfinished provisions that would otherwise have gone into effect. The continued uncertainty over the future of swaps reform has left members of the industry hesitant to trade. CFTC Commissioners Scott O’Malia and Jill Sommers have made repeated calls for an implementation timetable.
In addition to the adoption of an implementation schedule, Gensler hopes to finish rules on position limits, clearinghouse core principles, business conduct, entity definitions, trading, data reporting, and the end-user exemption next month. However, this ambitious plan will not encourage Commission staff to rush the delicate rule-making process: “We’re not trying to do this against a clock,” Gensler told reporters.