The law is passed but the rule writing processing is where the real nitty gritty details will be defined. My comments focus mostly on the execution space and definition of Swap Execution Facility:
McPartland says the new rules will mean more transparency for traders. “We’ll see much more readily accessible electronic data for swaps trading. We’ve already seen new swap execution facilities announced and the existing platforms will only grow as trading will need to go through those platforms based on the product, so it should make the execution process a lot more transparent regardless of the [trading] venue,” he says.
“The swap execution facility definition in the bill is very vague. What’s required from a reporting perspective and what products will be required for clearing [still need to be decided]. [The CFTC and SEC need] to handle the hundreds of products and the backlog of products that need to be examined to see if they need to be centrally cleared,” McPartland says.
McPartland says the rule-writing process could take six to 12 months with another six to 12 months of implementation time for everyone to comply with new rules. Ultimately, he predicts that the new regulatory order won’t be fully in place until 2012.