Few days ago Commissioner Jill E. Sommers from the CFTC gave a speech at the FIA/FOA International Derivatives Expo in London and besides thanking and flattering half of the world�s regulators he also managed to outline the regulatory roadmap and mentioned a few of the most critical issues that the CFTC is going to handle in the near future.
The topics mentioned by Sommers might prove what I�ve been suspecting for a quite a while: Forex trading in the US is on the road to become an exchange just like the equities and futures are centrally traded. This would probably take a while to materialize and several steps would need to happen first, but it seems that more regulation is the likely outcome of the steps CFTC is aiming to undertake.
However there are also several good things that this will create: a big emphasis on STP processing of orders meaning traders will trade with other traders big or small and not against its own broker, which clearly has other interests. OTC products (Forex is probably one of them) are also going to be much more transparent and reporting will become a bigger issue than what it is now.
Not to worry Forexmagnates, Commissioner Jill E. Sommers� speech was about centralized clearing for Derivative trading, not currency. And Jill is a she not a he. You can find and read the speech online.
thanks d-pip! i actually posted her picture on forex magnates, but forgot to update the text. she was talking about OTC instruments, as far as i know Forex is an OTC instrument as well, but let’s hope i’m wrong.
If forex was to become regulated and centralized, and we no longer trade against our brokers, whose interest are of their own, why is that a bad thing for traders?
Hi Sweet-Pip, if you read the full post on Magnates you’ll see that i argue that essentially this is a great step for traders and a pretty difficult one for brokers, for several reasons.
Ok…didn’t realize you had your own website. When I saw the title of your post here saying “it’s worse than you expected” I thought that it meant it was a bad thing for traders. Doesn’t sound like something to worry about anytime too soon though. Hopefully the big brokers like fxcm will just convert so I don’t have to go looking for a new one should this happen, cause that would be a pain…lol
She�s talking about credit default swaps, mortgage backed securities (aka toxic assest) , the crazy stuff that caused the financial meltdown. There has never been an open transparent exchange for trading these new securities and there probably should be.
BUT…let�s hope the government regulators stay off the backs of the FX traders!!!
Should be an interesting next year or two for the forex industry in the US. The NFA has already starting laying the groundwork for major changes moving forward with no hedging, FIFO, and we’ll see what else.
