WASHINGTON (Reuters) - A large-trader reporting rule, to collect data on swaps positions, could be one of the first swaps rules implemented by futures regulators under the new regulatory reform law, said the chairman of the Commodity Futures Trading Commission on Thursday.
The CFTC has proposed 51 rules under the Dodd-Frank law, which brings federal regulation to the vast over-the-counter derivatives market.
During a meeting of an agricultural advisory committee, CFTC chairman Gary Gensler said the large-trader reporting rule “might be something we can move in a more timely fashion” than some proposals that attracted thousands of comments.
Gensler later raised the possibility the reporting rule could be finalized “in the near term, in the summer, so we can begin collecting data.”
The reporting system would be a piece of a larger system to limit market share by traders and investors. CFTC staff workers said they hope to complete a review of 22,000 comments on the position limit proposal by the end of this month. They declined to say when a final version would be ready for discussion by commissioners.
The requirement for large-volume traders to report their swap positions would be phased out as data repositories, which track deals, come into operation.
Gensler described a possible phase-in of swaps regulation under Dodd-Frank, which generally requires derivatives to go through clearinghouses and to trade on regulated exchanges as much as possible. For example, a CFTC rule for clearinghouses could be completed, possibly during the summer, before clearing would become mandatory. Elements of the position limit rule also could be “phased,” he said.
Commissioner Scott O’Malia said at the start of the meeting the CFTC should write a comprehensive schedule for completing work on the new rules and when they would take effect so traders, investors and exchanges know what to expect.
Two members of the advisory committee said longer trading hours added to market volatility and did not help end users. Jordan Lea of the American Cotton Shippers Association said shorter trading hours would concentrate liquidity. Edgar Hicks of the National Grange said volatility was connected to increased opportunity to trade — “it supports the volume, it doesn’t help the user.”
Reporting by Charles Abbott; Editing by David Gregorio