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ARTICLE · 18 MAY 2009

U.S. Treasury Proposes Regulatory Framework For OTC Derivatives

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On May 13, the U.S. Department of the Treasury (the "Treasury"), in a joint statement with the Commodity Futures Trading Commission ("CFTC") and the Securities and Exchange Commission ("SEC"), announced its intention to seek legislative changes that could significantly alter the regulatory framework for over-the-counter ("OTC") derivatives transactions and markets in the United States.

United StatesFinance and Banking
Katten Muchin Rosenman LLP
Katten Muchin Rosenman LLP
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On May 13, the U.S. Department of the Treasury (the "Treasury"), in a joint statement with the Commodity Futures Trading Commission ("CFTC") and the Securities and Exchange Commission ("SEC"), announced its intention to seek legislative changes that could significantly alter the regulatory framework for over-the-counter ("OTC") derivatives transactions and markets in the United States. According to the Treasury, these changes are designed to achieve four goals: (1) preventing activities in these markets from posing risks to the financial system; (2) promoting the efficiency and transparency of these markets; (3) preventing market manipulation, fraud and other market abuses; and (4) ensuring that OTC derivatives are not marketed inappropriately to unsophisticated parties. While the Treasury proposal has yet to be embodied in proposed legislation, the Treasury has identified the following five areas that would be the subject of any such legislation:

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