Implications of Financial Reform Bill
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The comprehensive financial reform bill includes regulation of over-the-counter (OTC) derivative contracts aimed at improving transparency and accountability in derivative markets. The requirements in the bill could make these products more complicated or costly by creating new regulatory risks and increasing reporting, capital, and administrative requirements for companies that use derivatives for hedging/trading.
Overall, the bill increases the Commodity Futures Trading Commission's (CFTC) regulatory authority over derivatives. However, there is uncertainty over how the CFTC will define its jurisdiction.
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