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CFTC handling of swaps rules a 'train wreck' - commissioner O'Malia

Nov 01 2012 Ann Saphir, Reuters

The U.S. Commodity Futures Trading Commission created major confusion earlier this month when it imposed, and then suspended, a key rule governing energy derivatives, a CFTC policymaker said on Wednesday. "It was just a train wreck," Scott O'Malia, one of five CFTC commissioners, told the Futures Industry Association's annual meeting in Chicago on Wednesday. O'Malia is a frequent critic of the commission's implementation of Wall Street reform legislation steered by its Chairman Gary Gensler. The U.S. futures regulator waited until about 3 p.m. on Oct. 12, a Friday, before granting a reprieve to CME Group Inc and big energy traders on new rules that could have meant sharply higher costs had they taken effect as planned, on the following Monday. Don Wilson, who heads Chicago-based trading firm DRW, said the "complete lack of certainty" roiled markets. Clearport, as CME's energy clearing business is known, accepts natural gas and oil swaps, converts them into

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