Data Management

11:05 AM
Phil Albinus
Phil Albinus
Commentary
Connect Directly
Twitter
RSS
E-Mail
50%
50%

CFTC Maneuvers Between Banks and Regulators

Andy Warhol said 'In the future, everybody will be famous for 15 minutes."

But today's banks are worried that 15 minutes is more than enough time to lose their competitive edge.

Commissioners from the US Commodity Futures Trading Commission (CFTC) will meet today to vote on the "real-time" reporting of block trades as part of the Dodd-Frank Act.

As BusinessWeek reports:

The commission voted 3-2 on Nov. 19, 2010 to propose a 15-minute delay for reporting the block trades of standardized swaps, meant as a window to give traders a chance to hedge the big trades prior to them going public.

Banks, through industry groups, argued that the proposal for a 15-minute limit wasn't enough time to protect them from competitors taking advantage of their need to hedge. Banks use hedging, which involves offsetting trades with opposite transactions, to shield themselves from losses.

During the comment phase of the proposal, some industry heads tried to argue that 15 minutes was a little too real time. BusinessWeek reports that the Federal Reserve Bank of NY felt that "Dealers may hold on to positions for days or weeks before hedging." With this in mind, regulators want to make this reporting as close to the trade as possible, which has caused the inevitable bank and exchange backlash.

In further CFTC rules, the agency has postponed the implementation of new rules governing derivatives. The new rules were to have taken place this past July but were pushed back to December 31, just 10 days from today.

The rules on these complex financial instruments will now take place in July 2012, two full years after the passage of Dodd-Frank.

The further weakening of Dodd-Frank marches on.

Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio
Comment  | 
Print  | 
More Insights
More Commentary
The Art of Leveraging Governance, Risk & Compliance Technology Tools
Eliminating compliance risk across information channels is a constantly transforming task. Ongoing auditing and auto-corrective technology can increase trust, accountability, and transparency.
The FSB's Swaps Data Aggregation Report, a Technical Review
The Report discusses legal, technological, and regulatory issues to be resolved in order to obtain a complete view of swap transactions around the world.
Raising the Data Management Stakes
Data management can get firms only so far. Advanced data analytics is needed for all business lines and for calculating risk, especially with BCBS 239 on the horizon.
Asia/Pacific Challenged by T+2 European Settlement Cycle
A survey commissioned by Omgeo shows market participants in Asia/Pacific are ill prepared for Europe's T+2 settlement deadline in October.
The Future of the CIO
Todayís chief information officers are no longer hardcore technologists. And they arenít pure business leaders either. They need to have excellent business and technology acumen to succeed.
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - Elite 8, October 2014
The in-depth profiles of this year's Elite 8 honorees focus on leadership, talent recruitment, big data, analytics, mobile, and more.
Video
5 Things to Look For Before Accepting Terms & Conditions
5 Things to Look For Before Accepting Terms & Conditions
Is your corporate data at risk? Before uploading sensitive information to cloud services be sure to review these terms.