Several events this year have served to mark the progress made by US regulators in the implementation of the Dodd-Frank Wall Street Reform Act, as the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) work tirelessly on setting the complete reformation of financial markets in place.
Tomorrow, US Senators will reconvene in order to pose questions to top officials of the CFTC and SEC respectively in order to ascertain the reasoning for what the government officials consider the slow progress in the actual implementation of the Act, which so far has spanned over three years since President Barack Obama swore the Act into US law in 2010.
Although both regulatory authorities came to a conclusion earlier this month that final rulings have been reached on retail FX, SEC and CFTC officials will testify in tomorrow’s hearing to the Senate Banking, Housing and Urban Affair Committee regarding derivatives and the Volcker rule.
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“Derivatives are generally one of the very, very big issues,” stated Michael Greenberger, former director of trading and markets at the CFTC, adding that there is heightening controversy regarding derivatives trading outside of U.S. boundaries despite rulings having been finalized, and the Volcker Rule if implemented will see proprietary trading in its current form consigned to the history books in the United States, which is home to the vast majority of proprietary trading firms.
Massachusetts Democratic Senator Elizabeth Warren and Arizona Republican Senator John McCain have constantly been involved in encouraging an update to the 21st Glass-Steagall Act to separate traditional banking and investment banking, which will introduce more restrictions on market participants than the Volcker Rule, and therefore could ensure that panel discussions and hearings may continue for much longer.
In tomorrow’s Senate hearing, both the CFTC and SEC are expected to provide final implementation dates and reasons for the timescale being lengthy. This has been the subject of discourse within the regulators themselves, as SEC Commissioner Luis Aguilar spoke out just a day before the SEC issued its final rulings as to his dismay at the time taken for the SEC to produce the rulings.
Forex Magnates will follow the course of discussion taken in the Senate hearing and provide a full report on its outcome.