Release: #4367-00
For Release: February 22, 2000

 

CFTC Transmits Regulatory Changes to Congress

Changes Recommended By Staff Report Would Create A Flexible Structure That Replaces The Current One-Size-Fits-All Style Of Regulation

WASHINGTON--The Commodity Futures Trading Commission (CFTC) transmitted to Congress today a staff report which recommends changes to the regulatory structure that the CFTC administers. The report, titled A New Regulatory Framework, details changes that will lessen the regulatory burdens on United States futures markets by creating a more flexible regulatory framework.At the same time, the framework provides the over-the-counter markets with greater legal certainty.

The framework, which is still a work in progress, outlines three kinds of trading facilities, which would be subject to varying levels of Commission oversight. The degree of oversight applicable to each kind of facility would depend on the nature of the commodities traded and the sophistication of the market's participants. The framework is expected to replace the CFTC's designed-based rules with flexible "core principles."

The staff recommendations will serve as the basis for a notice-and-comment rulemaking, to be issued in the near future. During the comment period, the Commission expects to hold at least one public hearing to provide a full airing of the important public policy issues raised by the new framework. All of the staff recommendations can be implemented by the Commission under its administrative authority.

In sending the staff recommendations to Congress, CFTC Chairman William Rainer commented:

 The proposed framework promotes innovation, maintains the competitive position of United States markets, reduces systemic risk and provides the necessary level of customer protection. It accomplishes these goals while preserving the public interest in maintaining market and price integrity, and deterring market manipulation. As a separate but related goal, the framework complements and is consistent with the unanimous recommendations of the President's Working Group on Financial Markets.

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