A group supporting the CFTC in its ongoing litigation over the implementation of CFTC Rule 4.5, which narrowed the exclusion from registration for many mutual funds, has filed an amicus brief. The group, Better Markets Inc., states that it is a "non-profit organization founded to promote the public interest in the securities and commodities markets."
The group argues in its brief that the CFTC was not required to conduct a cost-benefit analysis of its rule in the traditional sense. Instead, the group argues, the CFTC was required only to "consider" the costs and benefits of its rules, in light of the public interest. The group argues that in this case, the rule is crucially necessary "in order to achieve the ultimate benefit of avoiding another financial and economic crisis - and possible second Great Depression." Requiring a "stringent" economic analysis of the rule, the group asserts, would thwart the CFTC's ability to implement the regulatory objectives of the Dodd-Frank Act. The brief explains:
"The CFTC has no obligation to quantify costs or benefits, weigh them against each other, or find that a rule will confer a net benefit before promulgating it. The rationale for this flexible obligation in the law is clear: requiring the CFTC to conduct a resource-intensive, time consuming, and inevitably imprecise cost-benefit analysis as a precondition to rulemaking would significantly impair the agency's ability to implement Congress's crucial regulatory objectives in the financial markets."
The complete filing can be found here.