In this speech, Commissioner Chilton discusses the purposes of Dodd-Frank generally, the recent district court ruling on position limits rules, and the regulation of high-speed trading.
Chilton notes that, in regard to the swaps regulations, the CFTC has received hundreds of requests for clarification and regulatory relief. Significantly, he states that if the CFTC has not received some kind of request for regulatory relief or clarification, then “we assume they will be fully compliant with all pending deadlines…. Providing clarity as to current requests does not equate with some kind of ‘blanket pass’ on compliance.” He goes on to state, however: “In the event we don’t answer people before this Friday, it would not be appropriate, reasonable, or responsible for the Commission to proceed against entities for non-compliance with a Dodd-Frank rule. I certainly cannot envision the Commission moving forward with such an action.”
An extended part of Commissioner Chilton’s speech concerns high-speed traders, whom Commissioner Chilton refers to as “cheetahs.” Commissioner Chilton also states a number of regulatory responsibilities which he believes should be applied to such traders, including the requirement of registration with the CFTC, although he does not specify the provision of the CEA or the CFTC Rule pursuant to which they should register (perhaps as pools, although that registration requirement would not apply to wholly non-U.S. vehicles with no U.S. investors).
Lofchie Comment: Firms should read carefully his remarks as to the CFTC’s enforcement policy, and should consider, among other things, whether there are open questions they want to raise with the CFTC. Link here for another speech, in which Commissioner Chilton describes his understanding of the CFTC’s view of enforcement where market participants have written a letter to the CFTC raising material questions.
View speech in full here (links externally to CFTC website).