On July 21, 2010, the President signed the Dodd-Frank Act. The legislation, the most wide-ranging reform of the financial regulatory system since the New Deal, introduces reforms in many areas, including banking, insurance, and the securities and derivatives markets. The legislation brings OTC derivatives under the regulatory oversight of the CFTC and the Securities Exchange Commission (SEC). The Dodd-Frank Act sets forth a comprehensive scheme to regulate derivatives dealers, require clearing of standardized OTC derivatives, and provide for transparent trading of standardized swaps on regulated exchanges or similar trading venues. The Dodd-Frank Act broadens the CFTC’s enforcement authority and enhances its regulatory oversight.
Implementing the new responsibilities given the CFTC by the Dodd-Frank Act is a significant priority and critical focus of the Commission during the first year of this Strategic Plan. Congress requires the CFTC to complete more than 60 rules within 360 days; some have deadlines of 90, 180, or 270 days. The workload attendant to the rulemaking process, together with studies and other actions to be taken, is unprecedented for the CFTC.
The CFTC began working on the draft rules that Congress assigned to it in July 2010. As of February 1, 2011, the CFTC has already issued one final rule, two interim final rules, and 43 proposed rules. Developing, vetting, finalizing, and implementing this many rules take an enormous effort. These rules will lower risk, promote market transparency, and further protect the U.S. public.
The CFTC began preparing for the task of writing rules for the swaps marketplace by identifying 30 areas of rulemaking to implement the Dodd-Frank Act (Appendix C lists the 30 areas). The CFTC has found that some of these areas only required one rule, while others required more. Staff teams have been assigned to each rule grouping. Where proposed and interim final rules have been issued, the Commission is affording as much opportunity as practicable for public comment both through written submissions and public meetings. The Commission will fully consider the comments and continue to offer this opportunity as additional proposed rules are developed. The CFTC has and will continue to work with the SEC and other regulators to maximize consistency and minimize overlap or duplication. All information will be considered in developing the best possible final rule.