Book Description

A Government Accountability Office report in October 2007 noted the growth of the OTC market and raised questions about whether the federal regulator had the information it needed to ensure that markets were free of fraud and manipulation.8 In the same month, the CFTC issued a report recommending legislative action to increase the transparency of energy markets.9 In May 2008, with the Farm Bill (H [...] The London Loophole Unlike the Enron loophole, which addresses the distinction between the regulated exchange markets and the unregulated OTC market, the "London loophole" refers to differences in the oversight of regulated markets in different countries. [...] However, in the case of ICE Futures Europe, the CFTC has waived that requirement, by means of a series of no-action letters, on the grounds that the U. K. market is already regulated at home, and that requiring it to register with the CFTC would be duplicative and add little in terms of market or customer protections.12 Initially, the U. K. market offered electronic access to U. S. traders to its [...] Because the dealer is using the futures market to hedge the risk of the swap, the exchanges and the CFTC exempt it from position limits, even though it does not deal in the physical commodity. [...] A number of bills call for studies of various aspects of the market, including the effects of raising margin, the adequacy of international regulation, the effects of speculation, and the impact of index trading on prices.