CFTC calls on banks to show compliance

 
Michael Bow
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THE US Commodity Futures Trading Commission (CFTC) has written to a host of global banks asking them for proof they are complying with sections of the Dodd-Frank Act.

The letter, sent last month, concerns rules relating to trade clearance times for over the counter swaps brokers, rules which form part of the act.

The CFTC has asked the banks, which include several UK institutions, to prove by Friday that they are complying with the time limits laid down by Dodd-Frank, according to Bloomberg.

The rules mean banks must accept or reject trades submitted for clearing within 60 seconds.

In November, the CFTC gave a number of banks an extension on the time limit for implementing the rules, to help them with the compliance transition.

The rule is designed to reduce systemic risk by increasing the speed trades are sent to clearing houses. Dodd-Frank was implemented in 2010 in response to the 2008 financial crisis.