WASHINGTON Dec 17 The top U.S. derivatives
regulator on Monday adopted a rule for markets to keep records
of trades, but told some dealers they did not need to tape
conversations after grain traders opposed it.
The Commodity Futures Trading Commission is implementing
important parts of the 2010 Dodd-Frank overhaul of Wall Street
regulations, writing the first-ever rules for the unregulated
$650 trillion swaps industry.
One of the rules would have required members of two types of
derivative trading platforms to record all oral communications
that lead to a trade in a cash commodity.
But grain traders in the National Grain and Feed Association
(NGFA) complained that the rule would force them to record every
conversation with farmers.
"In consideration of comments, the Commission adopted
modifications that preserve the rule's purpose without adversely
affecting the agricultural community," CFTC Chairman Gary
Gensler said in a written statement.
A host of grain giants - including Cargill, ADM, Bunge,
Louis Dreyfus, Scoular Co, Growmark, Newedge, Macquarie and
others - took part in a meeting organized by the CFTC on Aug. 29
to emphasize their objections.
In the final rule, there is no a requirement to tape
conversations about cash transactions, unlike those that lead to
trades in derivatives such as futures, options and swaps or
retail foreign exchange deals, the CFTC said.
Moreover, certain categories of traders do not have to tape
any verbally agreed deals.
"The final rule will impact a lesser number of market
participants than was proposed," the CFTC said.
The rule was agreed on unanimously by the CFTC's five
commissioners and was voted on in a written procedure, not in a
public hearing, as sometimes occurs.
Taped records of conversations - which must be kept for one
year - will preserve "critical evidence" in enforcement
investigations, the CFTC said.
The agency is a lead investigator in the global probe of the
rigging of the Libor interest rate benchmark.