“The CFTC will continue working hard to effectively oversee the futures market and implement reforms for the unregulated swaps market,” Gensler said. “But, without sufficient funding, the nation cannot be assured that this agency can oversee the futures and swaps markets and that end-users get the benefit of transparent markets, lower risk and enhanced market integrity. ”
Gensler mentioned the swaps and futures markets, saying that under the Dodd-Frank financial reforms, the CFTC is now in charge of overseeing those markets that were largely unregulated before the 2008 financial collapse.
Gensler also mentioned the three goals of the 2010 Dodd-Frank Act, including its attempt to enhance market transparency in the $300 trillion swaps market.
“The U.S. swaps market…remains the largest dark pool in our financial markets,” Gensler said. “The Dodd-Frank Act squarely addresses this by shifting some of the information advantage from Wall Street to the commercial end-user community – to the companies across the country that use these markets…by providing all market participants the opportunity to come together to transact on transparent and competitive trading platforms.”
Gensler said that swaps dealers are being regulated for the first time, and clearinghouses are now required to move transactions to the central, public clearing as part of an effort to minimize risk to the economy.
The Dodd-Frank Act also extends the CFTC’s enforcement authority to the swaps market and prohibits the use of fraudulent schemes.
Gensler said that while new enforcement capabilities are granted through the financial reforms, the commission requires proper funding to operate at maximum efficiency.