Overview
Risk.net quoted Matt Kulkin and Richard Shilts in an August 3 article titled "CFTC Block Trade Plan Gets Cold Shoulder." The article discusses how a Commodity Futures Trading Commission (CFTC) plan to revise US rules for block trades in swaps has drawn a cool response from the industry, with participants at an advisory committee providing feedback that undermines some of the justification for the proposal. A further question raised by market participants is why the CFTC has not taken the opportunity to align its deferral regime with that of the Securities and Exchange Commission (SEC), which has a standard 24-hour delay to reporting for block trades.
"It's one of the few instances where the two commissions agreed to disagree," says Kulkin, former head of the CFTC's division of swap dealer oversight until November 2019. "The rules were adopted early in the Dodd-Frank implementation process, where the CFTC went first and the SEC came up with its own approach. Now, years later, the CFTC is reconsidering its approach and proposing a delay that is even longer than the SEC's."
Shilts, former director of the CFTC Division of Market Oversight, says: "The intent of the public reporting requirement in Dodd-Frank was to enhance price discovery in the swaps market. If the delay is too long, by the time the market gets information about the trade, the information is likely to be stale and essentially meaningless."
The full article can be read at Risk.net (subscription required).