Futures body takes on CFTC over data gathering proposals
02 September 2010 | 6588 views | 0
The Futures Industry Association has slammed regulatory proposals to gather more account information from market participants as "premature" and overly burdensome for the industry.
In a letter to the Commodity Futures Trading Commission dated 17 August but just published, FIA president John Damgard urges the rulemaker to abandon its proposals and instead establish an industry-wide committee to address the operational and record-keeping issues facing the industry.
In the letter, Damgard warns that the cost of developing the necessary record-keeping and reporting systems would impose a "significant burden" on futures commission merchants and noted that at present there is no industry-wide uniformity in the customer data that is being collected or the systems used to store such data.
The lobby group also points out that with many Futures Commissions Merchants reliant on third party software vendors such as SunGard GMI and Ion Trading to provide back office data management systems, the industry has no control over the costs that would be incurred - and passed on - in modifying these programs to meet the new reporting requirements.
The FIA also noted that the CFTC may want to postpone action until it can coordinate the collection of futures-related data with the data that it will begin collecting on the over-the-counter derivatives, as mandated by Congress in the Dodd-Frank financial reform legislation.