Commissioner Bart Chilton made a speech (”Twists and Turns in Tradium”) before the Joint Annual Meeting of the Independent Connecticut Petroleum Association and Education Foundation Oil Heat Institute, Inc. of Rhode Island, Mashantucket, CT. Commissioner Chilton stated the need for better business values, standards and ethics. He noted that while Dodd-Frank goes a long way towards establishing some important parameters, only 131 of 398 rules have been finalized by government. Accordingly, Chilton believes that there is still important work to be done.
In particular, Chilton discusses the major loopholes and consequences in the Volcker Rule, suggesting that a clear reading and interpretation of hedging should be incorporated in the final Volcker Rule since the difference between hedging and speculating isn’t always easy to distinguish. Chilton also addressed the consequences of excessive speculation and outlined his concern that position limits will not completely stop the influence of excessive speculation. Last, Chilton discussed placing more requirements on high frequency traders.
Commissioner Chilton believes that these changes, combined with a thoughtful and balanced implementation of Dodd-Frank, will make the financial sector more competitive, provide greater transparency and cultivate increased confidence in the financial system.
View speech in full here (links externally to CFTC website).