OBAMA REGULATORY REFORM PROPOSAL GETS CHICAGO EXCHANGE’S SUPPORT

Posted July 17, 2009

WASHINGTON, D.C. – The chairman of the Chicago Board Options Exchange, who also serves as chairman of the World Federation of Exchanges, backed the Obama Administration’s recommendation to harmonize rules from the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) in Congressional testimony today.

“While the Reform Proposal outlines interim steps that can be taken to dampen some ill effects of divided jurisdiction, eventual consolidation of the agencies is the only true comprehensive solution,” said William J. Brodsky, Chairman of the CBOE and WFE, testifying on the Administration’s Financial Regulatory Reform Proposal to the US House Committee on Financial Services.

On behalf of the CBOE, Brodsky also seconded other provisions in the proposal, including the recommendation that a single authority, possibly the Federal Reserve, should supervise all firms that pose systemic risk to the financial system; that more regulatory oversight is needed for over-the-counter derivatives and that the SEC overhaul processes for reviewing rule changes by self-regulatory organizations to allow more of these to be effective immediately on filing.

Concerning creation of a systemic regulator, Brodsky said, “In creating such an oversight role, however, we need to be careful not to drain away the existing and important role that the SEC, CFTC, and Treasury play in monitoring for risk issues in their respective areas.”