CFTC's keynote address @ Boca Raton conference

/
Timothy massad @boca2015

Timothy massad @boca2015

On Wednesday 11 March, Timothy Massad, Chairman of the CFTC addressed the gathered masses in a keynote speech. The full speech can be found here but here is a quick overview of his talking points:

  • Regulation should be set up in a manner that avoids excessive risk build-up but also enables a proper foundation for the derivatives industry to thrive
  • The CFTC is finishing the rule writing on IRS moving towards the CCP implementing different requests from the community such as exemptions in reporting for certain users or packages
  • The final Dodd/Frank implementations mostly around the uncleared business and the margin requirements
  • The CFTC is working together with the European and Asian peers to get regulation in line as much as possible, but emphasizes that it will not be identical
  • Automated Trading Strategies will be an increased focus for the CFTC going forward, as well as cyber security
  • 75% of standardized swaps are now cleared via clearing houses. This means that the CFTC has to increase its focus on ensuring their stability
  • All measures that are taken have one thing in common, it should enable the CFTC to  be proactive in esuring the integrity of the system
  • Further discussions are being held on looking at risks other than the extremely rare defaults, such as operational stucture, security and the viability of recovery plans
  • The CFTC would like to do more examinations but lacks the resources to do so
  • The CFTC believes that rigorous ongoing oversight and a broad range of policies and procedures are instrumental in ensuring the longevity of this industry and that central clearing is fundemental  to the health of the markets