Philip McBride Johnson argues that the CME's IRS futures contract is still just a futures contract, and should be treated as such by regulators.
The Commodity Futures Trading Commission is reportedly
examining whether the CME Group's new interest-rate swap
futures contract, that converts to a swap at maturity, is an
end run around rules adopted by the CFTC for "major swap
participants," including the requirement to register as such if
an annual volume threshold is reached. Those rules do not apply
to futures contracts....
This is but the latest proof of the Dodd-Frank Act's
principal flaw, namely, its insistence that swaps are somehow
"different" from futures and options that the CFTC regime had
already reached for generations. Since the 1980s, the CFTC
tolerated the off-exchange use of swaps under certain
conditions but never said they were not futures or options
under the law. It was the Congress that made that leap of faith
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