The Commodity Futures Trading Commission (CFTC) may create additional procedures to ensure participants adhere to the Volcker rule, its acting chair Mark Wetjen has said.
Speaking to the House Committee on Financial Services about the impact of the Volcker rule, which was finalised in December between five US regulators and will limit banks from engaging in proprietary trading, Wetjen said the Commission was actively looking into the possibility of additional enforcement steps.
He said such steps would complement the efforts of a task force created by the five agencies behind the Volcker rule to oversee its implementation.
“That task force will be the proper vehicle to examine the means for coordinated enforcement of the rule,” he said. “Although compliance requirements under the Volcker rule do not take effect until July 2015, the CFTC is exploring now whether to take additional steps including whether to adopt formal procedures for enforcement of the rule.”
He said he had directed CFTC staff to consider such procedures and to make recommendations in the near future.
Although not detailing what such additional measures would include, Wetjen said the task force would address jurisdictional issues that are expected to arise due to the number of regulators involved in developing the rule.
Wetjen also called for greater CFTC resources to support the Commission’s expanding remit as the bulk of post-crisis rules formed under the Dodd-Frank Act shift into the implementation stage, such as the Volcker rule and regulation governing the trading and clearing of OTC derivatives.
The CFTC was given a modest increase of its budget to US$215 million, which Wetjen said was a step in the right direction.
“We will continue working with Congress to secure resource that match the agency’s critical responsibilities in protecting the safety and integrity of the financial markets under its jurisdiction,” he said. “We need additional staff for surveillance, examinations and enforcement, as well as investments in technology, to give the public confidence in our ability to oversee the vast derivatives markets.”