Swap-trading rules governing firms such as CME Group Inc. and ICAP Plc won’t be completed by mid-November at the main U.S. derivatives regulator, according to Commodity Futures Trading Commissioner Scott O’Malia.
The CFTC plans to first finish separate rules to ensure interest-rate and credit swaps are backed by clearinghouses that collect collateral from buyers and sellers, O’Malia said today at a Futures Industry Association conference in Chicago.
“I don’t think we are going to be able to get through this” by the CFTC meeting set for Nov. 15, because “there is a lot to be negotiated,” he said. “That’s way too soon.”
The CFTC and Securities and Exchange Commission are required by the Dodd-Frank Act to increase transparency in the swaps market after unregulated trades helped fuel the 2008 credit crisis. The law calls for measures requiring trades to be executed on exchanges or so-called swap-execution facilities.
Firms that have said they want to create swap execution facilities include inter-dealer brokers, Phoenix Partners Group LP, Javelin Capital Markets LLC, Tradeweb LLC and Bloomberg LP, the parent company of Bloomberg News.
The CFTC has other rulemakings to complete in November and December, O’Malia said, and swap-dealers are expected to register by the end of the year.