May 12, 2011
Good morning Chairman Johnson, Ranking Member Shelby and members of the Committee. I thank you for inviting me to today’s hearing on monitoring systemic risk and promoting financial stability. I am pleased to testify alongside my fellow regulators.
This morning I will provide an update on the status of the Commodity Futures Trading Commission’s (CFTC’s) process to implement the derivatives titles of the Dodd-Frank Wall Street Reform and Consumer Protection Act and discuss the how the CFTC has contributed to the Financial Stability Oversight Council (FSOC). Before I begin, I’d like to thank my fellow Commissioners the hardworking staff of the CFTC for their continued efforts to implement the Dodd-Frank Act.
Dodd-Frank Implementation Status
The CFTC is working deliberatively, efficiently and transparently to implement the Dodd-Frank Act. At this point, we have substantially completed the proposal phase of our rule-writing to implement the Dodd-Frank Act. Since the President signed the Dodd-Frank Act last July, the Commission has promulgated rules covering all of the areas set out by the Act for swaps regulation, with the exception of the Volcker Rule, for which the Act set a different timeline.
With the substantial completion of the proposal phase of rule-writing, the public now has the opportunity to review the whole mosaic of rules. This will allow market participants to evaluate the entire regulatory scheme as a whole.
To further facilitate this process, last month the Commission approved reopening or extending the comment periods for most of our Dodd-Frank proposed rules for an additional 30 days.
This time will allow the public to submit any comments they might have after seeing the entire mosaic at once. As part of this, I am hopeful that market participants will continue to comment about potential compliance costs as well as phasing of implementation dates to help the agency as we go forward with finalizing rules.
We will begin considering final rules only after staff can analyze, summarize and consider comments, after the Commissioners are able to discuss the comments and provide feedback to staff, and after the Commission consults with fellow regulators on the rules.
One component that we have asked the public about is phasing of rule implementation. Earlier this month, CFTC staff worked with SEC staff to host a roundtable to hear directly from the public about the timing of implementation dates of Dodd-Frank rulemakings. Prior to the roundtable, CFTC staff released a document that set forth concepts that the Commission may consider with regard to the effective dates of final rules for swaps under the Dodd-Frank Act. We also opened a public comment file last month to hear specifically on this issue. The roundtable and public comments help inform the Commission as to what requirements can be met sooner and which ones will take a bit more time.
Though we have substantially completed the proposal phase of rule-writing, the public will not be adequately protected until the agency completes final rules.