September 21, 2010 / 1:32 PM / 7 years ago

Real-time swaps reporting may start in Sept '11-CFTC

* First public Commission meeting Oct 1

* CFTC sees US and EU working together

By Christopher Doering

WASHINGTON, Sept 21 (Reuters) - The head of the U.S. futures regulator said Tuesday that mandatory real-time reporting of swaps trades, a key measure to promote market transparency, could begin as early as September 2011.

Gary Gensler, Chairman of the U.S. Commodity Futures Trading Commission, has been reluctant to provide details or a timetable for new rules to oversee the swaps markets until recently, but his latest remarks offered some early insight on the agency's direction.

"The earliest that real time reporting would come into effect will be in September of next year," Gensler said in prepared remarks to the U.S. Chamber of Commerce.

"The Commission also will consider the transition needs of entities, as appropriate, that are currently regulated and those that will soon come under regulation," he said.

The recently enacted Dodd-Frank bill gives regulators oversight over the $615 trillion over-the-counter derivatives markets, but requires the CFTC and Securities and Exchange Commission to refine the detailed regulations, determine what types of swaps will be covered and how they will police players involved such as swap dealers and major swap participants.

In addition to regulating swap dealers, the legislation requires standardized swaps to trade on exchanges or so-called swap execution facilities.

In most cases, Dodd-Frank gives U.S. regulators until July 15 of next year to write the rules followed by an implementation period for the industry.

Gensler said a litmus test to determine if an entity is a major swap participant relates back to whether it's "substantial enough to be relevant to the economy or the financial system as a whole."

In addition, he said because an estimated 200 groups may register with the CFTC as swap dealers, they will automatically not be considered a major swap participant.

"To be a major swap participant, you would have to not be a swap dealer and yet still be substantial enough to meet the requirements in the statute," said Gensler. "Most end-users, therefore, are not likely to fall within the major swap participant category."

The CFTC has organized its to-do list into 30 topic areas it must address during the next year to implement its part of Dodd-Frank. It issued its first final rule regarding retail foreign exchange transactions last month.

Gensler said the CFTC will hold the first in a series of public commission meetings to introduce new rules on Oct. 1.

The meeting is expected to address: time frame for reporting pre-enactment unexpired swaps to a swap data repository or to the CFTC; systemically important clearing organizations; and governance of clearinghouses, designated contract markets and swap execution facilities.

As the United States implements its financial reform plan, the European Union is taking similar steps. The EU last week unveiled a blueprint to curb or ban short-selling and tighten controls on derivatives.

Gensler, who will be traveling to Brussels to discuss U.S. reform and consult with the European Commission next week, said he believes the two plans can work together.

"I am confident that we will bring strong and consistent regulation to the two largest swaps markets," he said. (Editing by John Picinich) (christopher.doering@thomsonreuters.com; +202 898 8394 Reuters messaging: christopher.doering.reuters.com@reuters.net)

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