“While I agree that there is generally a preference for the legal certainty that specific versus general mandates provide, many of these new rules are unnecessarily complicated, confusing and, in some cases, redundant,” O’Malia said. “The result is that entities whose financial resources are already limited by the continued economic downturn must set aside additional resources to pay for more legal and compliance personnel who will be tasked with sorting through thousands of pages of rules to ensure that these entities don’t run afoul of new regulation.”
O’Malia said that the commission should issue clearer, simpler rules to ease the compliance burden.
“The [CFTC] needs to make its rules more black and white,” O’Malia said. “We can foster cost-effective compliance by clearly articulating the purpose and desired effect of our regulatory requirements. The [CFTC]’s objective in implementing the Dodd-Frank Act should be compliance and not enforcement.”
O’Malia added that Dodd-Frank reforms are unlikely to solve “too-big-to-fail,” adding that the commission should focus on the costs associated with implementing financial reform.
“We must be mindful of the massive burden these new regulations will have on all business, but in particular Main Street businesses, who did not contribute to the financial meltdown of 2008 and 2009,” O’Malia said. “We must be more sensitive to the massive costs these rules will impose on all entities and the impact this will have on cost-effective risk management.”