Governor Powell's speech recognizes a number of the major risks of CCPs to the financial system. As he points out, the incentive system that might motivate CCPs to keep themselves safe is so uncertain that CCPs would still require "careful consideration," and a "number of [unidentified] factors would need to be considered in implementing [a skin-in-the-game] requirement" for the owners of CCPs. Although Governor Powell asserts that it is important for no institution to be too big to…

As noted in the no-action request, the CFTC has prohibited CFTC-regulated exchanges from trading contracts involving certain political events. See "Order Prohibiting the Listing or Trading of Certain Political Event Contracts." According to the CFTC order, the reason that trading in contracts for political events is prohibited is because the "unpredictability of the specific economic consequences of an election means that the Political Event Contracts cannot reasonably be expected to be used…

When regulators adopt a major set of new rules (as when businesses launch a major new activity), they must do so on the basis that the rules will have some positive, predictable benefit that can be observed reasonably. Picking up on Commissioner Piwowar's comment about the lack of economic analysis, what effect will the new rules have on the mortgage markets or the financial markets generally? Does the rule make it harder or easier to get a mortgage? How does the rule affect the willingness…

The Original Letter contained criteria that raised difficult compliance issues for firms. While the Revised Letter goes a long way toward resolving these difficulties, firms still should be aware of certain important issues.

1. No Requirement to File for Relief. While the Original Letter required firms to file requests for registration relief for CPO delegations, the Revised Letter dispenses with this requirement. In addition to relieving the CFTC of the administrative burden of…