G.O.P. CFTC Bill Would Further Ease Hedge Fund Marketing Rules

Jun 25 2014 | 8:21am ET

A Republican effort to limit the Commodity Futures Trading Commission’s powers over swaps also includes a possible gift for hedge funds.

The House of Representatives yesterday passed, essentially along party lines, a bill reauthorizing the CFTC for five years. But the regulator that emerged would be an etiolated one, barred from imposing new rules through guidance, a reaction to the agency’s promulgation of new rules for overseas swaps trading last year.

But the bill would also require the CFTC to follow the Securities and Exchange Commission in eliminating restrictions to hedge fund advertising, which the SEC did last year.

Still, it seems unlikely that either provision—along with ones that would require a study of high-frequency trading, a review of metals warehousing and increased protection of customer funds at futures firms—will become law. The White House said it “strongly opposes” the bill, which would undermine “the efficient functioning” of the CFTC while offering “no solution to the persistent inadequacy of the agency’s funding.”


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The U.S. Commodity Futures Trading Commission (CFTC) ordered The Goldman Sachs Group Inc., and Goldman, Sachs & Co. to pay a $120 million penalty for attempted manipulation and false reporting of ISDAFIX Benchmark Rates, a global benchmark for interest rate products.