UPDATE 2-CFTC to miss swaps regulatory deadlines-chairman

Wed Mar 16, 2011 1:31pm EDT

  
 * Will finalize rules in three groups, starting in spring
 * Definitions for swap dealers, end users will come first
 * Dunn: plan may alleviate concerns about the rules
 * Sommers: disappointed swaps definitions to come near end
 (Adds background, comments from lawmaker, commissioners)
 By Roberta Rampton
 BOCA RATON, Fla., March 16 (Reuters) - The U.S. futures
regulator will begin finalizing rules for the over-the-counter
swaps markets in spring but will miss July deadlines for many
regulations set by financial law reforms, its chairman said.
 Gary Gensler on Wednesday sought to appease critics in the
industry and on Capitol Hill who have said the Commodity
Futures Trading Commission unveiled its rules in a hurried
jumble, making it hard to assess the impact on swaps trade,
worth about $600 trillion globally.
 The CFTC will try to first finalize rules defining swaps
dealers and major swaps participants early in the process --
who will be subject to the toughest scrutiny under the law --
as well as "end users" who will be exempt from requirements to
clear trades, Gensler told a Futures Industry Association
conference.
 Gensler said the agency would try to finalize the rules in
three tranches, noting the schedule is not set in stone. He
hoped to finish the process in the fall. Gensler said he wants
to hear from the four commissioners who lead the agency, the
industry, and lawmakers.
 "I think that ought to alleviate a lot of the concerns I've
heard from people," Michael Dunn, a Democratic commissioner,
told Reuters after Gensler's speech.
 CFTC IN TOO BIG A HURRY-LAWMAKER
 The Dodd-Frank financial regulatory reform law gave the
CFTC the lion's share of authority to police over-the-counter
derivatives, blamed for helping accelerate the financial
crisis.
 The CFTC scrambled to propose more than 40 new, detailed
regulations to put the law into effect, drawing fire from
lawmakers like Frank Lucas, chairman of the House Agriculture
Committee.
 "I think the challenge is we're in too much of a hurry,"
Lucas told Reuters at the Food and Agriculture Summit on
Wednesday. "This is such a huge market -- trillions of dollars
-- we need to get it right."
 Gensler told the FIA the agency hopes to finalize rules in
three clusters and may consider phasing in the effective dates
of regulations by asset class.
 But the pace might still be too fast, particularly for a
large middle tranche, said Scott O'Malia, a Republican
commissioner.
 "If we did two a week, that's 10 weeks of that middle
bunch, that will kill us, it'll kill the staff, it'll kill
everybody," O'Malia told reporters. "Unlike the first round,
this matters, we've got to get it right."
 SWAPS DEFINITION TO COME AT END
 The CFTC still has yet to unveil the types of swaps
products covered by the sweeping regulations and capital and
margin requirements for swap dealers and major swap
participants, and won't likely finalize those rules until the
fall, Gensler said.
 Jill Sommers, a Republican commissioner, said she was
disappointed Gensler placed the swaps definition as one of the
final items.
 "I'm not convinced there's something that seems more
logical than definitions first," Sommers told Reuters.
 In his speech, Gensler stressed that the commissioners --
who have openly disagreed on many of the proposed regulations
-- would be consulted for their input before being asked to
vote on a final version.
 "He has to get three votes, so that's a logical step,"
Sommers said. "In some cases, we were being consulted on rules
that had already been written, and we had very little input, --
and in some cases, no input -- into proposals."
  (Additional reporting by Ann Saphir and Jonathan Spicer in
Boca Raton, and Charles Abbott in Washington, Editing by Andrew
Hay)


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