Rep. Scott Garrett, R-N.J., chairman of the House Financial Services Capital Markets Subcommittee, sent a follow-up letter to Gary Gensler, chairman of the Commodities Futures Trading Commission (CFTC) on Friday urging him to respond to a letter he had sent in early March with a host of questions regarding the derivatives title under the Dodd-Frank Act.
Republicans on the House Financial Services Committee passed legislation on May 25 to delay by 15 months implementation of derivatives regulations as set forth in the Dodd-Frank Act.
CFTC Chairman Gensler (left) testified before the subcommittee in February about regulatory, economic and market implications of the derivatives title under Dodd-Frank, and it was at the hearing that Rep. Spencer Bachus, R-Ala., chairman of the full committee, said he would hold the hearing’s “public record” open for 30 days so that members of the committee could send follow-up questions to Gensler.
Garrett told Gensler in his follow-up letter that as of Friday, June 3, “you have not responded to any of my questions, and as a result, the public record for the hearing remains incomplete.” Garrett went on to say that “since the extended comment period for all rules referenced in my letter has now closed and you have had three months to think about how to thoroughly and specifically address my questions, I would respectfully request once again that you provide me detailed written answers to each of my questions by the close of business on Friday June 10, 2011.”
The list of 12 questions Garrett posed to Gensler is extensive.
As an example of the type of question, Garrett (left) said that he feared the CFTC, through its rulemaking process, “may be setting up a system that encourages regulatory arbitrage, one where American financial companies will be severely disadvantaged vis-à-vis their foreign competitors.” Garrett said that “unnecessarily onerous rules will, with no doubt, drive money to non-U.S. markets.” He asked Gensler: “How can you convince us that we won’t see American firms lose business to foreign competitors and lose jobs overseas?”