The "Over-the-Counter Derivatives Markets Act of 2009"calls for legislation that will "promote the transparency and efficiency," in OTC derivatives markets, and mitigate "excessive risk to the financial system." The administration also intends to pass legislation that, by year-end, will "prevent market manipulation, fraud, insider trading and other market abuses," in OTC derivatives markets and aims to prohibit sale of OTC derivatives to "unsophisticated" investors.
Provisions of the proposed legislation give power to the Commodity Futures Trading Commission and Securities & Exchange Commission to jointly issue rules but gives the Treasury the power to step in if the two regulators don't, "jointly prescribe uniform rules and regulations under any provision of this Act in a timely manner."
Comments? Please send them to email@example.com. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.