…Principles-based regulation, that is. The Options Clearing Corporation released testimony to be given by their Chairman and CEO Wayne Luthringshausen at a meeting tomorrow on the harmonization of the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC). In his testimony, Luthringshausen calls for “combining the functions of the SEC and CFTC under a new principles-based statute to ensure holistic oversight of all derivatives products.” The battle between the SEC’s rules-based approach and the CFTC’s principles-based approach to regulation has caused conflict in the industry for years.
In making his case that ”the current regulatory structure for derivatives is [not] the optimal one for our financial markets and their customers,” Luthringshausen cites past regulatory stalemates that resulted in delays for the introduction of credit default options and options on gold and silver ETFs. He called the regulatory disputes “a source of embarrassment to the SEC and CFTC.” In meetings tomorrow and Thursday the SEC and CFTC will hear from a panel of experts including exchange heads and representatives from the Futures Industry Association, National Futures Association, FINRA and Managed Funds Association. With regulatory conflicts from the past lurking in the background, it will be interesting to see how “harmonious” these meetings on harmonization will be.
Tags: CFTC, Options Clearing Corporation, regulation, SEC, Wayne Luthringshausen
