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June 03, 2011 at 09:48 AM
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.
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?”