The head of the U.S. futures regulator on Tuesday defended broad new measures to oversee the swaps market and brushed-off efforts in Congress to make changes to sweeping financial reform that regulators are months behind in putting in place.
The U.S. Commodity Futures Trading Commission has laid out an aggressive timetable to complete a regulatory framework for the $600 trillion over-the-counter derivatives market required under last year's Dodd-Frank law.
Republicans, chafing at new regulations, have been vocal in their criticism of the CFTC. Lawmakers this week were scheduled to consider proposals that would make changes to Dodd-Frank.
"I'm aware of (the bills), but ... we have a law in front of us," Gary Gensler, the chairman of the CFTC, told reporters after addressing a Futures Industry Association conference in Chicago.
"We're moving to finalize rules consistent with that statute," he said.
The U.S. futures regulator has finalized 15 rules, but most of the high-profile and controversial rules remain including one to curb excessive speculation.
Gensler has outlined a timetable for the rules the CFTC expects to consider in 2011 and the first quarter of 2012. But he acknowledged some of those rules may slip into the second quarter. 1/8nN1E7870VW 3/8
"It will probably be a little bit longer than (the first quarter), but I look at the next six to nine months as a time where we at the CFTC get this done," said Gensler.
In addition to its own rules, the CFTC is working closely with the Securities and Exchange Commission on a handful of rules. Gensler said a rule defining entities could be finished before the end of November and one defining products could be completed before 2012.
The CFTC already has postponed two meetings where a vote on position limits was scheduled, with the most recent coming because it lacked the three votes needed for approval. A vote is now slated for Oct. 18.
Gensler said at the Oct. 18 meeting the CFTC also may consider granting the massive swaps market more relief from complying with new financial reforms until sometime in 2012 as the agency remains well behind in completing many of the largest and most contested rules. He declined on Tuesday to say how long the additional relief would be.
The CFTC first voted in July to delay some swaps rules that had been set to go into effect. The new effective dates were set as late as Dec. 31, or until the agency had finalized the rules.
The CFTC approved the first wave of relief just days before missing a July 16 deadline for implementing rules to comply with the Dodd-Frank law.
The lack of finalized rules risked creating a legal void for off-exchange derivatives trades used by companies and traders to offset risk on interest rate shifts or commodity price swings. There were fears the trades could be challenged or invalidated.