6.24.2009 U.S. Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler spoke before the Managed Funds Association in Chicago, Illinois, regarding the regulation of OTC derivatives and hedge funds. Gensler counseled that Congress needs to establish a regulatory regime to cover the entire OTC derivatives marketplace to accomplish four goals: (1) lowering systemic risk; (2) providing transparency and efficiency in markets; (3) ensuring market integrity by preventing fraud, manipulation, and other abuses; and (4) protecting the retail public. Chairman Gensler stated that he envisions two complementary regimes—one for regulation of the dealers and one for regulation of the market functions. Gensler also spoke about hedge funds and that advisers should be required to report information on the funds they manage that is sufficient to assess whether any fund poses a threat to financial stability. Gensler stated that even if the SEC takes on new responsibilities in the hedge fund area, the CFTC should continue to maintain its enforcement authority over funds trading in the futures markets registered as Commodity Pool Operators (CPO) and those that file annual financials with the CFTC.
Click http://www.cftc.gov/stellent/groups/public/@newsroom/documents/speechandtestimony/opagensler-5.pdf to access Commissioner Gensler’s full remarks.