The US may compel over-the-counter derivatives to be traded on exchanges, if the bold policy agenda advocated by Gary Gensler, the president’s nominee to chair the Commodity Futures Trading Commission, is carried out.
Derivatives professionals hoping that Gensler would save them from the aggressive moves in Congress to curb the market through legislation may be disappointed. Gensler favours much tighter regulation – and presumably he has the support of the president. However, the exchange-traded futures and options markets will be pleased about two things – he opposes a merger of the CFTC and the Securities and Exchange Commission, and seemed likely to champion the exchange-traded model.
Testifying in confirmation hearings to the Senate Agriculture Committee on Tuesday February 24, Gensler repeatedly said that all derivatives should be regulated by the CFTC – addressing head-on an issue that has caused contention between the CFTC and Securities and Exchange Commission...