Despite concern the looming reauthorization of the Commodity Futures Trading Commission could chip away at OTC legal protections gained by the Commodity Futures Modernization Act of 2000, lawyers expect the President's Working Group on Financial Markets to limit the scope of its proposal for regulatory jurisdiction to retail forex markets.
The PWG, comprised of the secretary of the Treasury, the Federal Reserve chairman, the Securities and Exchange Commission chairman and the CFTC chairman, is expected to deliver its proposal for reauthorization this month. Not much is known so far about the content of the proposal. Industry professionals, however, including the International Swaps and Derivatives Association, The Bond Market Association and theSecurities Industry Association, are arguing their deliberate exemption from regulation reduces systemic risk and promotes financial innovation, and are hoping the reauthorization will not meddle with the status quo.
