The lack of transparency is often blamed for problems in the marketplace, but now a regulator is saying a regulator must improve its public review process.
The regulators must do a better job of writing the new Dodd-Frank rules, which will govern the trading of over-the-counter derivative contracts and other financial products.
That’s the opinion of Scott O’Malia, a commissioner of the Commodity Futures Trading Commission.
The CFTC, along with the Securities and Exchange Commission, is part of a group of regulators assigned to interpret the huge Dodd-Frank financial reform law.
In speeches and interviews, O’Malia has been arguing for more public hearings and a published scheduled on the implementation of these rules. These rules will determine which transactions must go through a clearing process and which will not.
Ultimately, O’Malia says, hundreds of new rules will come out of the Dodd-Frank Act. But the lack of schedule, O’Malia recently told CQ&D, has been a problem.
"I’ve asked and asked and asked for the commission to publish a full implementation schedule from soup to nuts on when the rules are going to be considered and in what order they will be implemented in," he said.
O’Malia notes that the uncertainty about when the new rules become effective is difficult for firms.
Why?
They want to comply, he notes, but are still waiting for guidance from regulators.
The way to clear up the confusion, he adds, is to set up an implementation timetable.
"I think that will give the market a much better order in how they can make their investments and will able to comply with these rules. Then they can begin to put in place staffing, investments and technology that is necessary to comply with our statutes," he said.
For more on O’Malia’s comments on Dodd-Frank and other issues, please see our Q&A feature on page 44.
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