CFTC Chair J. Christopher Giancarlo stated that, contrary to certain news reports, he has not made a decision to retract the CFTC proposal to rewrite rules governing swap execution facilities. (See generally " Swap Execution Facilities, the Sequel.") Mr. Giancarlo characterized claims suggesting that he was "walking away from fixing flawed SEF rules" as "absurd." He further stated that "[a]ny thought of re-proposing any elements of [the] proposal is premature before public comments [are] received and considered." Mr. Giancarlo's comments came in response to a report in The Wall Street Journal on Tuesday that Mr. Giancarlo "plans to abandon an existing proposal . . . and rewrite it after incorporating industry feedback."
Commentary / NihalPatel
Withdrawing the proposal - even if the CFTC were to change its mind and decide it was bad policy - would be somewhat surprising. The CFTC is not required to act on the proposal as is. It can choose, after reviewing comments, to (i) do nothing, (ii) issue a re-proposal, or (iii) move forward to final rules based on the existing proposal.
It remains unclear what exactly the CFTC intends to do, but not indicating its intentions would be a normal approach to notice-and-comment rulemaking. That is, Mr. Giancarlo seems to be suggesting that the CFTC will consider comments on the proposal and then decide what to do. (The comment period is scheduled to close on February 13.)
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