Notably, the SEC, in adopting , did not impose IM requirements on transactions with affiliates. While the SEC action has only limited impact given the SEC's limited jurisdiction (the security-based swaps market is very small relative to the swaps market, and of even less consequence to commercial companies), the SEC's action is nonetheless consistent with the content of this letter, and implicitly acknowledges that the imposition of margin requirements has costs as well as benefits.

There are numerous ways in which the arbitrary separation of financial products into those that are SEC-regulated and those that are CFTC-regulated is economically wasteful. To take a simple example, a long position in a basket of S&P stocks and a short position in a futures contract relating to those stocks are hedged, and the margin required of the position should be lowered to reflect the hedge. Instead, because they are subject to two different regulatory schemes, each is margined…

This act by the House sends a very loud message. The contents of the message are, however, not clear.

To boil down this report to a single sentence: In a competitive battle between big tech and big finance, big tech is going to be the winner.

According to the report, big tech's superior access to data, superior usage of that data, greater size, larger customer base, and more diverse range of product offerings makes it the overwhelming long-term favorite in a competitive battle with traditional financial service firms. The report finds this both potentially good (lower costs to…