CFTC Approves Six-Month Delay of Dodd-Frank Swaps Regulations

The U.S. Commodity Futures Trading Commission finalized a plan delaying until as late as the end of the year new regulations for the $601 trillion swaps market.

The CFTC published an order today that would provide “temporary relief” from Dodd-Frank Act rules that had been slated to take effect on July 16, a year after the law’s enactment. The delay will give the CFTC time to write more than 40 rules aimed at reducing risk and boosting transparency after largely unregulated trades helped fuel the 2008 credit crisis.

“This order enables the commission to continue its progress in finalizing rules,” Gary Gensler, CFTC chairman, said in a statement. The rule was approved by the agency’s five commissioners, according to Steve Adamske, CFTC spokesman.

The Securities and Exchange Commission on June 15 also decided to postpone Dodd-Frank rules, scheduled to take effect on July 16, that govern trades conducted by banks such as Goldman Sachs Group Inc. and JPMorgan Chase & Co.

Under the CFTC plan, measures scheduled to take effect July 16 and that refer to agency rules that haven’t been finalized will be delayed until those rules are adopted, though not later than Dec. 31. The agency’s commissioners also could decide to push the deadline into 2012 if they find that more time is needed, the CFTC said in the order.

The CFTC has begun finalizing Dodd-Frank rules, including new powers for the agency’s enforcement lawyers to pursue fraudulent manipulation of derivatives and commodities markets.

The agency has scheduled a July 19 meeting to complete rules related to whistleblowers and the processing of trades in clearinghouses.

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