On Wednesday, Commodities Futures Trading Commission (CFTC) Commissioner Bart Chilton called for a “Bill of Rights” for end users in the derivatives market.?
Chilton said in a statement via Advanced Trading, “”At the dawn of the United States of America, the founding fathers set out 10 principles, the “Bill of Rights” that would bind the new national democratic government. Similarly, today I am setting out 10 principles to guide the Commission as we move into a new, more transparent Dodd-Frank regulatory regime.”
The timing comes as the April 10 is fast approaching for end users’ compliance of Dodd-Frank swap and derivatives reporting rules. For many of them, this will be the first time they will fall under the CFTC’s regulation.?
In these suggested “Bill of Rights,” ?they will protect market participants that utilize these financial products to hedge risk and they propose greater transparency and speculative limits.
The Rights include the following:
1.?Right to reasonable Dodd-Frank implementation
2.?Right to legal certainty
3.?Right to compete in the markets (this includes high-frequency registration, caps on speculation and the implementation of speculation limits by May 1)
4.?Right to safe accounts
5.?Right to have confidence in the commodity markets (increasing civil monetary penalty maximums for entities ($10 million) and individuals ($1 million)
6.?Right to clear (or not to clear)
7.?Right to margin flexibility and reasonable capital rules (find a compromise on cap requirements for non-financial SDs)
8.?Right to hedge
9.?Right to smart regulation
10.?Right to be heard
Chilton added of the 10 “rights”, “I believe these principles best protect our consumers and end-users who help move our economy forward-and let’s keep in mind that these end-users were not the cause of the financial crisis that lead to financial reform. In fact, end-users were among the many victims of the crisis and much of Dodd-Frank was drafted with their interests in mind.”