The Treasury department took the next steps in regulatory reform for over the counter (OTC) derivatives when it delivered legislative language to Capitol Hill yesterday. Treasury looks for Congress to create a bill on the matter by the end of the year, according to its press release. The legislation contains proposals from the Treasury’s regulatory blueprint from June, including requiring central clearing and trading of standardized OTC derivatives and moving more OTC derivatives on exchanges.
In a statement, International Swaps and Derivatives Association CEO Robert Pickel said, “We are examining the details of the draft legislation being especially mindful of the need to preserve the availability and flexibility of privately negotiated derivatives for American companies.” Commodity Futures Trading Commission Chairman Gary Gensler in a statement called the legislative proposal “a very important step toward much-needed reform to protect the American people by lowering risk, promoting transparency and protecting market integrity,” adding, ”I believe that all over-the-counter derivatives and dealers should be brought under comprehensive regulation.”
