Now that we have proposed rules in 28 of the 31 areas, I want to take this opportunity to talk to you about what’s next. First, I’m going to chat a bit about the remaining proposals. Second, I will discuss some of the things we at the Commission have been talking about regarding sequencing of final rulemakings. Third, I will discuss some considerations regarding phasing implementation through the Commission’s authority to set rule effective dates.
Key amongst the proposed rules that we still need to consider are three that require significant coordination with our fellow regulators: capital and margin, product definitions and the Volcker Rule. There are others that we have yet to propose because we sought additional public input, such as segregation for cleared swaps and testing and supervision. We also still have some additional conforming rule proposals that we will consider. Other than the Volcker Rule, it is our goal – though we are human and we might slip – to complete proposed rules by the end of April.
As the CFTC completes the proposal phase of the rulemaking process, we are looking ahead to final rulemakings. There are two principles that will guide us through the final rulemaking process. First, we will begin considering final rules only after staff can analyze, summarize and consider comments, after the Commissioners are able to discuss the comments and provide feedback to staff, and after the Commission consults with fellow regulators on the rules. One component that we have asked the public about relates to cost-benefit analysis. Seeking public comment is one of the best ways to get a clearer picture of the costs and benefits of proposed rules.
Second, Congress gave the CFTC flexibility as to setting of the implementation or effective dates of the rules. So, even if we finish finalizing rules in a particular order, that doesn’t mean that the rules will be required to become effective in that order. Implementation dates may be conditioned upon other rules being finalized. Furthermore, we are looking at phasing implementation dates based upon a number of considerations, possibly including asset class, type of market participant and whether the requirement would apply to market platforms, like clearinghouses, or to specific transactions, such as real time reporting. For example, we are considering whether a rule might become effective for one asset class or one group of market participants before it is effective for other assets or other groups of market participants. We are looking to phase in implementation, considering the whole mosaic of rules.
In terms of timing of finalizing rules, amongst the staff and Commissioners, we have been discussing dividing proposals into three broad groups. For lack of better terms: early, middle and late. Today I will share with you some of my thoughts on how the rules could be divided. We are still consulting closely with each other on how we group final rules, so the groups I will share with you this morning could change. Your feedback is also appreciated.