By Benjamin Goad - 06/12/13 10:08 PM EDT
Last summer, the CFTC proposed a rule to exert greater oversight of so-called “cross-border” swaps in accordance with the 2010 Wall Street reform law. Swaps were seen as a leading contributor to the 2008 economic crisis, and proponents of the regulations say they are crucial to stabilizing the near $700 trillion derivatives market.
The CFTC is now weighing draft final guidance but Commissioner Scott D. O’Malia said he doubts the agency would be able to come to a final agreement by July 12. More work is required to coordinate the language with the Securities and Exchange Commission.
O’Malia, a Republican, has asked his four fellow commissioners to release a proposed extension for public comment. The measure would move the deadline to the end of the year.
“We are now close on harmonization, but we are not quite there yet; we just need a little more time,” O’Malia said during remarks at a conference in London. “The Commission should allow for that extra time to get things right.”
Also Thursday the House approved legislation meant to limit the CFTC’s authority to regulate the international swaps market. The Swaps Jurisdiction Certainty Act, though criticized by the Obama administration, passed by a vote of 301 to 124, with 73 Democrats joining the majority.
Proponents of the measure say the planned rule would only add additional burdens facing the businesses, which have come to rely on derivatives to hedge against risk.
Speaking on the House floor, Rep. Jeb Hensarling (R-Tx.), chairman of the House Financial Services Committee described the bill as a “bipartisan response to what many view to be, frankly, regulatory red tape overreach.”