The rollout of regulations under the Dodd-Frank Wall Street Reform and Protection Act has been pushed back until at least early 2012, according to the Commodity Futures Trading Commission (CFTC). The delay marks the second time the CFTC has put the brakes on new rules governing the over-the-counter derivatives market.
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In June, the CFTC said the rules would be finalized by the end of 2011 — which already would have been six months past the original deadline.
The New York Times’ Dealbook called the derivatives rules delay “another setback for the sweeping overhaul passed in the aftermath of the financial crisis.” But CFTC Chairman Gary Gensler said the federal regulator is “not against a clock” to implement the Dodd-Frank regulations.
“No doubt, as this is a human endeavor, there will likely be changes to this outline down the road,” Gensler said at a public meeting Thursday. “We also will continue to reach out to other regulators, both here and abroad, for their input as we consider the many thousands of comments on these rules.”
To date, the CFTC has finished 12 final rules under Dodd-Frank, and the agency will host a full schedule of public meetings this fall. Compliance represents a “major step” in the CFTC’s efforts to make financial reform a reality and to protect the American taxpayer, Gensler added.
“We are looking to consider external and internal business conduct rules related to risk management, supervision, conflicts of interest, record-keeping and chief compliance officers,” Gensler said.
Gensler also said he supports a proposal to establish schedules to phase in compliance with previously proposed requirements, including one surrounding the swap trading relationship documentation. The proposal would provide greater clarity to swap dealers and major swap participants regarding the time frame for compliance, as well as give them an adequate amount of time to comply, he said.
As SearchCompliance.com Executive Editor Chris Gonsalves pointed out earlier this summer, delays such as the recent CFTC’s recent announcement could be only the tip of Dodd-Frank’s iceberg of problems. I understand federal regulators want to get things right under Dodd-Frank regulations, but a failure to implement hard and fast compliance rules in a timely manner could end up only further alienating consumers already mired in the current economic malaise. Stay tuned.