* CFTC needs to quantify costs of its new rules - Sommers
* Swap execution rule goes beyond SEC, EU versions
* Position limit plan more extensive than EU proposal
By Roberta Rampton
WASHINGTON, March 7 The U.S. futures regulator
is going too far and too fast toward pushing swaps onto new
trading platforms, one of its top officials said on Monday.
The Commodity Futures Trading Commission's proposed rule on
swap execution facilities, which is open for public comment
until Tuesday, is inconsistent with proposals by the Securities
and Exchange Commission and international regulators, said Jill
Sommers, a CFTC commissioner.
"One of my primary concerns is that the CFTC is moving out
of step in time, substance, or both with the SEC and the rest
of the world in implementing trade execution requirements for
standardized swaps," Sommers said in a speech to the Institute
of International Bankers.
The Dodd-Frank financial reform law requires more
over-the-counter swaps to trade on exchanges or new swap
execution facilities, or SEFs, to increase transparency in the
formerly opaque market.
The CFTC has proposed that new SEFs send
requests-for-quotes on trades to at least five swap dealers,
while the SEC would allow a request to go to a single dealer,
depending on the customer's wishes.
The European Commission is still in the early stages of
considering a proposal that would allow for single-dealer
platforms, a "fundamentally different" model than the CFTC's
"I support the more flexible approach being considered
elsewhere," said Sommers, a Republican commissioner who voted
against the proposal when it was first unveiled.
Sommers said she hopes the CFTC will adopt a more flexible
regulation. After the comment period ends, the agency will
consider whether changes are needed, and commissioners will
need to vote again to finalize the plan.
Sommers, who has objected to a number of rules proposed by
the CFTC, also said the agency's plan for position limits for
energy, metals and agricultural commodities goes beyond what
international regulators are considering.
The European Commission has proposed giving national
regulators in the European Union the option of setting position
limits, but may only require the limits for farm products.
A plan for ownership restrictions for clearinghouses and
SEFs also go beyond European proposals, and "may do more harm
than good," Sommers said.
The CFTC needs to do a better job analyzing the costs and
benefits of their proposed rules, Sommers said.
"The proposals we have issued thus far contain cursory,
boilerplate cost-benefit analysis sections in which we have not
attempted to quantify the costs," she said.
"We owe the American public more than the absolute
minimum," she said.
TAKE A LOOK-CFTC's push for new rules on commodity trading:
(Reporting by Roberta Rampton; editing by Jim Marshall)