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CFTC Chairman Gensler Discusses Swaps Marketplace Transformation

In his last public speech as CFTC Commissioner, Gary Gensler reflected on the CFTC’s accomplishments during his five years at the agency.  He discussed the increased transparency in the swaps marketplace as one of the CFTC’s most significant accomplishments during his term.  He noted that information about the price and volume of each swap transaction is publicly available as it occurs and that the agency now publishes a Weekly Swaps Report to provide a detailed view of the swaps markets.  He also praised the 19 temporarily registered swaps execution facilities for further improving pre-trade transparency, and therefore lowering costs for investors.

Chairman Gensler also discussed the benefits of mandatory central clearing of swaps for financial entities and dealers.  He stated that 70 percent of interest rate swaps are currently being cleared, up from 21 percent five years ago.  He also described the elimination of significant time delays for swaps clearing that were common five years ago, noting that 99 percent of swaps clearing occurs within 10 seconds.  Chairman Gensler discussed the CFTC’s reforms for swap dealers, which include new risk management standards and new documentation requirements. 

Chairman Gensler then turned his focus to items that remain unfinished, including finding replacements for LIBOR.  He also noted his hope that the CFTC would receive additional funding to cover its greatly expanded responsibilities.