Law Needs to Cover Marketplace Without Exception Says CFTC Chairman

The chairman of the Commodity Futures Trading Commission, Gary Gensler, has some changes he would like to see made in the Obama administration's proposed changes in regulating the complex financial instruments blamed for hastening the global economic crisis. Gensler has urged changing the measure to eliminate exemptions from new requirements for foreign-currency swaps and small firms dealing in derivatives, among other things.

In a letter to committee leaders in the House and Senate, Gensler said the administration's proposal will go a long way toward reducing risk and bolstering the transparency and integrity of the $600 trillion derivatives market, but he believes the law must cover the entire marketplace without exception.

As for foreign-currency swaps, Gensler said in his letter, that excluding foreign-currency swaps from the new restrictions as the White House bill proposes is overly broad and could enable dealers to structure other swaps transactions in a way to skirt regulation. Gensler says the administration and Congress have an historic opportunity to repair shortcomings in our regulatory system.