CFTC Sends Changes to Congress

February 23, 2000

The Commodity Futures Trading Commission (CFTC) has sent to Congress a staff report that recommends changes to the regulatory structure that the CFTC administers. The report details changes designed to lessen the regulatory responsibilities on futures markets by creating a more flexible regulatory framework.

At the same time, says CFTC, the framework provides over-the-counter (OTC) markets with greater "legal certainty." The report is titled "A New Regulatory Framework." CFTC says it is a work in progress.

Three kinds of trading facilities are outlined in the framework, all of which would be subject to varying levels of CFTC oversight. The degree of oversight to each kind of facility would depend on the nature of the commodities traded and the sophistication of the market’s participants. The framework is expected to replace the CFTC’s current prescriptive rules with flexible "core principles."

The recommendations will be the basis for a notice of rule making and a comment period, to be published in the near future. During the comment period, CFTC will hold at least one public hearing to provide an explanation of the policy issues raised by the framework.

CFTC Chairman William Rainer said the framework "promotes innovation, maintains the competitive position of U.S. markets, reduces systemic risk and provides the necessary level of customer protection. It accomplishes these goals while preserving the public interest in maintaining market and price integrity and deterring market manipulation."

Click here to see the full text of "A New Regulatory Framework".