CFTC Commissioner Quintenz Examines Oversight Of CCPs

In remarks at the Federal Reserve Bank of Chicago's Fourth Annual Conference on CCP Risk Management, CFTC Commissioner Brian Quintenz raised questions about the CFTC oversight of central counterparties ("CCPs") and the challenges of maintaining a healthy clearing system.

Commissioner Quintenz explained that the CFTC is responsible for overseeing 16 designated clearing organizations ("DCOs" or CFTC-registered CCPs) in addition to various other market participants. He said that the CFTC oversees DCOs through three primary methods:

• Review of applications and rule changes. DCOs must submit rule changes to the CFTC for review, and these rule changes cannot be implemented until the CFTC has "ample time to review" them. Two DCOs are designated as "systemically important" ("SIDCOs"). Rule changes submitted by the SIDCOs are subjected to heightened scrutiny in the form of a coordinated review by the CFTC and the Board of Governors of the Federal Reserve ("FRB").