* 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)
By Christopher Doering
WASHINGTON, Sept 15 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
"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
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
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
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]
(Additional reporting by Daniel Bases in New York)
(Editing by Jim Marshall and Bob Burgdorfer)