The yearly conference of the ISDA (International Swaps and Derivatives Association) started in Madrid on Wednesday. Gary Gensler, the chairman of the U.S. SEC (Securities and Exchange Commission) of the United States, as well as Rostin Behnam – the chair of the CFTC (Commodity Futures Trading Commission) of the United States, were both at the positions of the chief speakers at the occasion in which the morning session featured Behnam whereas the afternoon featured Gensler.
A considerable discussion was made by Behnam regarding a request for a modified registration order as a DCO (derivatives clearing organization) by a body pursuing to provide a direct clearing of skirted goods to retail members, which referred to the request of FTX US.
While the rest of the registered institutions have expressed to be interested in discovering the analogous models and keeping in view the probable influence on futures commission merchants (FCMs) and clearing members, it is much more significant to be clear along with offering a chance to the public to speak about it, as Behman stated, directing the attention of the CFTC roundtable to the topic which is expected in the latter part of this month.
Sam Bankman-Fried, the CEO of FTX, may have listened to the words of Behnam because he was there on the very occasion and some hours later took part in a chat. In addition to this, Behnam recalled his testimony in February and mentioned that he would keep on promoting the support of the CFTC’s legislative authority to construct a regulatory agenda dealing with the market of commodities based on digital assets.
At the moment, the CFTC just performs the regulation of the market of derivatives, even though it has utilized enforcement authority on the cash markets, like the fine imposed by it on Coinbase over the inadequate reporting of the self-trading as well as the exchange volume. Gensler chose the commonalities shared by derivatives and the crypto to be his topic for discussion in a considerably shorter address.
In his words, if the venues – regardless of being related to a centralized or decentralized world of finance – provide security-based swaps, the securities laws get concerned about them and they ought to operate within their regime specified for securities. Gensler emphasized that the ISDA requires determining if the core asset has a status of being a security. The securities regulations ought to be complied with by the derivatives as the legal standards are being set by the ISDA regarding crypto derivatives.