CFTC to rework energy plan with new law: Gensler

WASHINGTON (BestGrowthStock) – The U.S. Commodity Futures Trading Commission will rework its energy position limit plan to comply with the financial reform bill — one of many challenges to test the agency’s resources in coming months, its chairman Gary Gensler said on Thursday.

The futures regulator, which will gain oversight of the $615 trillion over-the-counter swaps market as part of the financial overhaul, has identified 30 topic areas and multiple rules it must write to implement the new law, Gensler said.

“We plan to actively publish proposed rules in the fall, using regular public Commission meetings for this purpose,” Gensler said in remarks for a Securities Industry and Financial Markets Association (SIFMA) conference in New York.

The Senate is expected to pass the financial regulatory reform bill as early as today, which is designed to clamp down on Wall Street in the wake of the 2007-2009 financial crisis. The U.S. House of Representatives approved the bill earlier this month.

The CFTC will work with the Securities and Exchange Commission on some of the rules needed to implement the derivatives portion of the law, and will also work closely with the Federal Reserve Board, the Federal Reserve Bank of New York and other bank regulators to gain insight, Gensler said.

“In addition to working with our American counterparts, we have just started reaching out to international regulators in an effort to harmonize our approach to swaps oversight with that of regulators around the world,” Gensler said.

The bill creates a huge workload for the historically cash-strapped agency, with most of the complex rules required within a year — and some much sooner.

“Some will be consistent with our current authorities, such as overseeing exchanges and clearinghouses, but expanded to also oversee swaps. Some will be new responsibilities, such as regulating swap dealers and swap data repositories,” Gensler said.

The law will require the CFTC to set position limits for physical commodities across both futures and over-the-counter markets.

Because of this, the CFTC will need to redo its controversial plan to limit speculative positions in energy markets, proposed in January, Gensler said.

The CFTC also published a proposed rule for retail foreign exchange transactions in January, which will need to be finalized within 90 days of the bill’s enactment, Gensler said.

(Reporting by Christopher Doering and Roberta Rampton; Editing by John Picinich)

CFTC to rework energy plan with new law: Gensler