A Republican member of the U.S. Commodity Futures Trading Commission is seeking an Office of Management and Budget review of Dodd-Frank Act derivatives rules that he says have gotten insufficient scrutiny from his agency.
Scott O’Malia, one of two Republicans on the five-member CFTC, said the agency has failed to analyze alternatives to its regulations and hasn’t justified its choices with specific cost-benefit analysis. He made the comments in a letter to Jeffrey Zients, OMB’s acting director, dated yesterday.
O’Malia asked for a review of CFTC regulations, approved yesterday by a 3-2 vote, for record-keeping and business conduct standards for swap dealers and other large swap participants.
“The commission has failed to carefully and precisely identify a clear baseline against which the commission measured costs and benefits and the range of alternatives under consideration,” said O’Malia, who voted against the rule.
The CFTC and Securities and Exchange Commission are leading U.S. efforts to write derivatives regulations after largely unregulated trades helped fuel the 2008 credit crisis. Dodd-Frank, the regulatory overhaul enacted in 2010, calls for most swaps to be guaranteed by clearinghouses and traded on exchanges or other platforms.
Steve Adamske, a CFTC spokesman, didn’t immediately respond to a request for comment.