UPDATE 1-CFTC cancels Sept 22 meeting to consider final rules
* CFTC cancels meeting to finish cost-benefit analysis
* Position limits, clearinghouse rules expected on Oct 4
* CFTC has finished about a dozen rules so far
(Adds comments from O'Malia, Gensler; reason for delay)
WASHINGTON, Sept 15 (Reuters) - The U.S. futures regulator, already behind schedule on completing new financial reform measures, said it canceled next Thursday's meeting in order to finish work on a clearinghouse rule and a plan that would limit speculative positions held by commodity traders.
The U.S. Commodity Futures Trading Commission has provided the agency's five commissioners with early drafts of the rules but has yet to complete a review calculating the total expected costs versus the expected benefits.
The CFTC said it will hold its next rule making meeting on Oct. 4 where agency officials expect it to take up clearinghouse rules and the long-awaited position limits plan -- which would place limits on the number of commodity futures, options and swaps contracts that a speculative trader can hold.
"I've asked for a stronger cost benefit analysis and I'm encouraged they are working on a stronger cost benefit analysis but I haven't seen it and it remains to be seen if we've hit the mark," Scott O'Malia, a Republican CFTC commissioner, told Reuters.
Gary Gensler, the chairman of the CFTC, downplayed the cancellation of the meeting.
"You are going to see this happen from time to time," Gensler told reporters after a speech in New York.
"We are only going to keep a meeting if we have gotten everything, each of the commissioner's input and the documents prepared and so forth, and each of the next two that are in the queue are very important matters to the markets and very important matters to Dodd-Frank," he said.
Cost-benefit analysis has been viewed as a way for industry players to sue over rules they don't like, and a flawed process has been cited in the past to challenge regulatory rules.
Earlier this year, the CFTC's inspector general issued a study at the request of House Agriculture Chairman Frank Lucas which found some serious flaws, including a lack of available data on industry compliance costs and a one-size-fits-all approach. [nN18242989]
In response to the criticism, the CFTC issued an internal memo in May that laid out new guidelines to help bolster its cost-benefit analysis as it gears up to finalize new Dodd-Frank rules on derivatives.
The CFTC has laid out an aggressive rule making schedule to complete a regulatory framework for the previously opaque $600 trillion over-the-counter derivatives market required under last year's Dodd-Frank law. The agency has four more meetings scheduled this year.
The regulator so far has finalized nearly a dozen rules, but most of the high-profile and controversial rules remain.
Gensler last week outlined a timetable for the rules it expects to consider in 2011 and the first quarter of 2012.
The agency plans to consider clearinghouse rules, end-user exception, and real-time reporting this year, and rules for capital and margin, disruptive trading practices and swap execution facilities in 2012. [ID:nN1E7870VW]