CFTC to offer final rules on swaps

Good morning. This meeting will come to order. This is a public meeting of the Commodity Futures Trading Commission (CFTC) to consider final rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). I’d like to welcome members of the public, market participants and members of the media, as well as those listening to the meeting on the phone or watching the webcast.

I would like to thank Commissioners Sommers, Chilton, O’Malia and Wetjen for their significant contributions to the rule-writing process.

Today, I particularly want to thank the CFTC’s hardworking and dedicated staff. Under Dodd-Frank, this agency has been tasked to oversee the swaps market, which is seven times the size of the futures market. The staff is working incredibly long and hard hours to write new rules of the road to make this market safer for the American public. I know I express the sentiments of my fellow commissioners when I say that we hope all of you enjoy the holidays with your families.

As the year draws to a close, I would like to reflect on what the Commission has accomplished this year. This time last year, this agency was writing rule proposals for the recently passed Dodd-Frank Act. Now, the CFTC has substantially completed the proposal phase, and last summer, we turned the corner and started finalizing rules. So far, we have finished 20 rules – potentially 22 after today.

The CFTC is working to complete these rules thoughtfully – not against a clock. We have benefited from significant public input, including 27,000 comment letters, 1,100 meetings and 14 roundtables with more roundtables scheduled for next year.

Some of the major rules we finalized are:

• The large trader reporting rule that provides a detailed and up-to-date view of the physical commodity swaps market so regulators can police for fraud, manipulation and other abuses. This rule went into effect November 21. As soon as this rule was finalized, CFTC staff immediately engaged with market participants to ease the process of compliance. In addition to regular dialogue, our staff developed a guidebook of data standards, which can be found on our website. In similar fashion, our staff will reach out to market participants regarding today’s data rule.

• The rule establishing registration and regulatory requirements for swap data repositories (SDRs), which will gather data on all swaps transactions. The rule became effective October 31, and the registration process is underway.

• Rules giving the Commission more authority to effectively prosecute wrongdoers who recklessly manipulate the markets and rewarding whistleblowers for their help in catching misconduct in the financial markets. The anti-manipulation rule went into effect August 15, and the whistleblower rule became effective October 25. The whistleblower office is up and running with a director in place.

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