Futures – Next Step For OTC Regulation

Kevin McPartland, senior analyst at Tabb Group, doesn’t think position limits will force U.S. business overseas. “There is some level of harmonization between the U.S. and regulators in Europe. They’re trying to not create a situation where there’s a lot of regulatory arbitrage. The regulations, although different, won’t be [so] extreme in one jurisdiction that you’ll be forced to move to the other,” he says.

McPartland questions exactly how much change the harmonization efforts will create and says some of the report’s recommendations could be a hindrance for market participants. “The [report] says both the SEC and CFTC will be the regulators [of the OTC markets] and that’s a nightmare waiting to happen,” he says. “It’s still going to be a very bifurcated regulatory environment. It’s not going to be any different than it was before,” he adds.

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