House Republicans are pushing Treasury Secretary Timothy Geithner to delay major derivatives rules set to go into effect on Oct. 12. Industry has pleaded with the Commodity Futures Trading Commission to delay several regulations, including provisions that will define which non-banks qualify as swap dealers and rules that will govern derivatives trades made by foreign subsidiaries of U.S. companies (so-called “cross-border” trades).
“You are well aware that widespread confusion and uncertainty exists among market participants regarding the implementation of these new rules, especially with respect to exactly how the Commodity Futures Trading Commission plans to impose and enforce these rules,” the lawmakers wrote to Geithner on Friday. Signatories included House Agriculture Chairman Frank Lucas of Oklahoma and Financial Services Chairman Spencer Bachus of Alabama.
The petition is largely a political step, since Geithner would have little interest in bigfooting another agency, particularly when the agency in question is implementing some of the bedrock derivatives provisions of Dodd-Frank.
But as the GOP lawmakers note in their letter, the Financial Stability Oversight Council, which Geithner heads, could vote to delay the rules in the name of financial market stability and regulatory harmony. Still, it’s hard to imagine it swinging into action at this late date.