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Peterson, Frank release concept paper for derivative trading
House Ag Committee Chair Collin Peterson and Financial Services Committee Chair Barney Frank have developed a concept paper for the regulation of derivatives. The plan would strictly regulate clearinghouses; Primary oversight of clearinghouses would be shifted from the Federal Reserve to a market regulator; All OTC derivative trades must be reported to a qualified trade repository; Rules of the Security and Exchange Commission and the Commodity Futures Trading Commission would be used for regulation. The proposal also strengthens capital and margin requirements and seeks to limit speculation.
Chairman Peterson says it bridges the differences between those who want to completely eliminate the over-the-counter market and those who think greater transparency is all that is needed. Chairman Frank says members of the two committees now have plenty of time to study the concept and be ready to get to work when Congress returns on September 1st.
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