SEC delays Dodd-Frank Act derivatives measures

12 Jun

Bloomberg reported:

“The U.S. Securities and Exchange Commission will delay some Dodd-Frank Act derivatives measures scheduled to take effect in July, giving regulators more time to finish rules for the $601 trillion market.

Dodd-Frank, the financial-regulation overhaul enacted last year, set a mid-July deadline for measures designed to improve transparency and reduce risk in the over-the-counter swaps market. The SEC and the Commodity Futures Trading Commission are continuing to seek comment on rules, and have said they would miss the scheduled completion date for some measures.

Registration of derivatives such as credit-default swaps could “unnecessarily impede” use of clearinghouses meant to reduce risk, the SEC said in the proposal, which was released for public comment.”

Clearing houses are aggregating risks at a dangerous level. I would prefer to take the other side of the SEC. The clearing houses are going to increase risks. There is absolutely no way they can regulate an overwhelmingly speculative $601 trillion casino. 

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