The proposal targets potential conflicts of interest as affiliations grow among clearinghouses, exchanges, swap venues, brokers and market makers in U.S. derivatives markets.
The Commodity Futures Trading Commission has proposed amendments to Part 37, Part 38 and Part 39 of its regulations, along with changes to Commission regulations 1.52 and 1.55, and will take public comments for 60 days after the measure is published in the Federal Register. The proposal responds to what the agency said is a rise in affiliations among CFTC-regulated entities, including derivatives clearing organizations, designated contract markets, swap execution facilities, futures commission merchants and market makers, with the aim of addressing perceived and potential conflicts of interest tied to those links. Chairman Michael S. Selig said the principles-based approach is designed for vertically integrated market structures and seeks to support responsible innovation in U.S. derivatives markets while strengthening market integrity without imposing excessive compliance costs.