CFTC Votes 4-to-1 for Rules Aimed at Wall Street Swap Abuse – Silla Brush and William  Selway (BusinessWeek)
January 12, 2011

“U.S. regulators moved to soften Dodd-Frank Act rules designed to protect less-sophisticated customers in swap trades after banks, pension funds and municipalities said the original plan could damage the market. The Commodity Futures Trading Commission, meeting in Washington today, voted 4-1 for revised regulations that ease responsibilities initially proposed for Wall Street banks. The changes loosen requirements that trades be suitable for clients and limit banks’ obligation to act in the best interest of public agencies, so long as they don’t recommend specific swaps. …The business-conduct rules for municipal investors have been the subject of lobbying since they were introduced in December 2010. The measure approved today aims to address concerns about potential market impact that were raised by pension funds, the Government Finance Officers Association and the Securities Industry and Financial Markets Association, whose members include JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley. …The final regulations are a ‘significant weakening’ of the CFTC’s original proposal, Marcus Stanley, policy director of Americans for Financial Reform, which includes AFL-CIO and other labor unions, said in an e-mail today. ‘The numerous opt-outs, exceptions, and safe harbors in the final rule can effectively give swap dealers a free pass out of compliance with key statutory protections,’ Stanley said.” Click here for more.