The US Commodity Futures Trading Commission is expected Thursday to unveil four sets of proposed rules to implement its new regulatory regime under the financial reform law, including a call for public input on how the agency should deal with disruptive trading practices.
Thursday's meeting will be the 12th public meeting the agency has held on rulemaking for the Dodd-Frank Wall Street Reform and Consumer Protection Act and in remarks prepared for the meeting Commissioner Scott O'Malia criticized what he said is the agency's race to implement the dozens of rules mandated by the law. He said the process has already produced 975 pages of new rules in the Federal Register.
"I remain concerned that we are moving at a pace that makes it very difficult, if not impossible, for the public to dig out of that mountain of paper and piece together all of these new requirements in a meaningful way," he said.
O'Malia also criticized the agency for approving overlapping rules and for providing what said has sometimes been insufficient public comment periods.
"None of this seems to make sense, nor does it seem to be in keeping with the spirit of the [President Obama's] Executive Order on regulations that reminds us to seek meaningful public participation and afford comment periods that should generally be at least 60 days," he said.
The CFTC is expected Thursday to issue a proposed interpretative order that asks how it should interpret a change in the Commodity Exchange Act that was made in the Dodd-Frank Act. The change would ban certain types of trading practices, such as "spoofing," which is bidding or offering with the intent to cancel before execution. The order would open a 60-day comment period on how these changes should be implemented.
In his prepared remarks for the meeting, Commissioner Bart Chilton said the agency needs to aggressively address disruptive trading practices, which he tied to high-frequency and algorithmic trading practices.
"We need explicit rules to address trading using advanced analytics," Chilton said.
The CFTC also is expected to unveil proposed rules on new regulations for commodity pool operators and commodity trading advisers, requirements for processing, clearing and the transfer of customer positions and registration of intermediaries.
CFTC Chairman Gary Gensler Thursday said the agency will not consider a proposed rule on swap data recordkeeping and reporting requirements for swaps entered into before Dodd-Frank becomes effective. Commissioners had been expected to consider the proposal as of late Wednesday.
