CFTC reminds investors of intent of Dodd-Frank Act

By Marc Castro

Sep 28, 2013 05:41 AM EDT

A warning was issued by the US Commodity Futures Trading Commission for owners of government mandated swaps platforms that was set to go online by next week. These owners must ensure all types of buyers and sellers would be able to participate.

The main US derivatives regulator called the attention of these swap execution facilities and brokers through a letter last Sept.26 to keep the intent of the Dodd-Frank Act, especially its requirement of transparency. It was obvious that the regulator saw some shoddy arrangements currently in place, but did not specifically identify these arrangements by name.

Many lobbyists though have sought a postponment for the implementation of the said guidelines on October 2. On this date, these investors would need to start trading on the SEFs instead of private platforms. According to letters from the CFTC, the requests have been denied despite some delays to the data reporting and enforcement requirements of the SEFs.

According to the CFTC Chairman Gary Gensler, "What we've found in the last two weeks is there was some pushing back on the other side." He said that some swap users were suggesting that everyone on a SEF to have a credit arrangement with everyone else on the swap execution facility. He said, the systems need to have 'impartial access.'

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