CFTC Proposes Open Swaps Clearing for Small Banks

The Commodity Futures Trading Commission approved a proposed rule to force the world’s largest banks to offer swaps clearing services to smaller firms, a change that would promote competition in the $615 trillion market.

The proposed rule comes after an industry group of more than 20 mid-size brokers such as Jefferies & Co., Imperial Capital LLC and Newedge USA LLC told regulators they’ve been denied access to swaps clearing because dealers want to keep the market to themselves. Current rules favor larger banks such as JPMorgan Chase & Co. and Deutsche Bank AG that have more capital and expertise to be clearinghouse members.

“Swaps dealers or major swaps participants are prohibited from interfering with or attempting to influence decisions related to the provision of clearing or the acceptance of clearing customers,” according to the proposed rule. The potential regulation now enters a 60-day public comment period before any final CFTC vote.

Read more about swaps clearing…