CFTC Chair Timothy Massad provided updates on his top five priorities: (i) margin requirements for uncleared swaps, (ii) automated trading, (iii) cybersecurity, (iv) swap execution facility trading, and (v) data reporting.
In a speech before the Futures Industry Association, Futures and Options Expo, Chair Massad reported progress on:
- Margin for Uncleared Swaps. Chair Massad said that he expects that "other jurisdictions will soon finalize their margin rules." He said that he intends to ask his "fellow Commissioners" to consider a reproposal of capital requirements for swap dealers and major swap participants "in the coming weeks."
- Automated Trading. Chair Massad indicated that the CFTC will "consider a supplemental proposal on certain issues related to it in the near future" that includes the Regulation Automated Trading ("AT") proposal's source code provision.
- Guarding against Cyber Threats. Chair Massad observed that the CFTC has finalized rules to bolster protections against cyberattacks and other types of operational market risk.
- Swaps Trading. Chair Massad stated that the CFTC Staff: (i) "has taken steps to fine-tune [CFTC] rules to improve SEF trading in a number of areas through several no-action letters"; (ii) is considering a review of the "made available to trade" determination process; and (iii) is working with European counterparts on enhancing the harmonization of trading platforms.
- Improving Data Reporting. Chair Massad highlighted that the CFTC: (i) adopted a rule "to create a simple, consistent process for reporting cleared swaps"; (ii) published a draft of technical specifications for the reporting of 120 priority data elements; (iii) will consider a proposal to change the rules to give swap data repositories greater ability to make sure the data they receive is complete and conforms to required standards; and (iv) is implementing a change to Dodd-Frank that will make it easier for the CFTC to share swap data with other regulators, both domestic and foreign.
Chair Massad noted that additional supervisory or regulatory stress tests currently are being conducted by the CFTC staff "to make sure our clearinghouses are strong and resilient." He reported that this "exercise encompasses futures, options on futures and swaps that are cleared at these five clearinghouses": CME Clearing; ICE Clear Credit; ICE Clear Europe; ICE Clear U.S.; and LCH Clearnet Limited.
Chair Massad also emphasized that the CFTC is "working hard to finish the position limits rule" and expressed optimism that it will be finalized by the end of 2016.
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