SFOA: Regulators Take Industry Heat

Regulators came under fire this morning at the Swiss Futures and Options Association's 33rd Bürgenstock meeting in Interlaken."My personal view on the regulators hard work if I summed it up in a single word is dysfunctional. That is, sitting from a global perspective, how I see the regulatory system that we're operating in developing, or perhaps not developing," said Paul Willis, global compliance officer at ABN AMRO Clearing in London, on the Legislators' and Regulators' recent hard work panel.

Willis described regulatory developments in the U.S. as a "complete shambles." The European Commission has been pragmatic by considering how best to implement the G20 requirements and considering industry views, he believes. "If there is a concern from the European Union point of view, I would worry very much about timeframes for implementation," added Willis.

Walt Lukken, president and ceo of the Futures Industry Association in Washington, D.C., raised the question of whether regulation has made the marketplace any safer than four years ago, pre-financial crisis, noting that there have been numerous unintended consequences as a result of regulatory changes. "What's going to be the cumulative effect of more and more and more regulation [on futures commission merchants]...I would say we are going to see consolidation, we are going to see people leaving the business, we are going to see major structural changes."

Willis questioned the Commodity Futures Trading Commission’s director of international affairs, Jacqueline Mesa, on how regulators expect market participants to comply with rules for swap dealers in a 60-day timeframe when the regulators are repeatedly deferring the final rule-making process. "We're still waiting for rules that will help us decide whether we are going to be a swap dealer or not," said Willis. Mesa responded saying that firms just "have to get on with it," which Willis responded with, "How can we get on with it if we don't know if we're going to be a swap dealer yet?...We have 60 days from the rule-making to implement it, that is blatantly unreasonable."