About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

SEC’s Cox Calls for Congress to Regulate CDS Market, Continues Debate with CFTC About Jurisdiction

Subscribe to our newsletter

Originally appeared in MiFID Monitor

Securities and Exchange Commission (SEC) chairman Christopher Cox has repeatedly urged the US Congress to pass legislation concerning the oversight of the credit default swap (CDS) market. Cox again made a plea to the US government last week to provide regulation of the sector as a matter of urgency. However, Bart Chilton, commissioner of the Commodity Futures Trading Commission (CFTC), who has also been campaigning for CDS regulation, says that oversight should remain under the jurisdiction of the commodity futures regulator.

It is widely agreed that the OTC credit derivatives sector is in need of stronger regulation. For example, the recent failure of American International Group (AIG) and its subsequent need for government bailout have been attributed to its exposure to the CDS market. Accordingly, the firm’s two recent chief executives, Martin Sullivan and Robert Willumstad, have both given public support to the introduction of further regulation in the market.

However, exactly who will be responsible for enforcing this regulation is still up for debate. The subject of CFTC’s regulatory scope with regards to CDSs will be discussed this week during hearings of the House and Senate agriculture committees, which have jurisdiction over the CFTC. Unfortunately, these discussions will not deal with the issue of which regulatory body (CFTC or SEC) will perform regulatory oversight over the sector in the long run.

There have been calls in the past for the SEC’s role to be expanded to cover the regulation of swaps and, last week, Republican Edward Markey reintroduced a bill that would expand the SEC’s coverage of derivatives. Currently, swaps are not defined as securities because they are traded off exchange and thus do not fall under the SEC’s remit.

Talks about the imminent establishment of clearing bodies for the CDS market are also ongoing at the moment, as market players including CME Group, Eurex and ICE provide more details about their respective planned platforms. It seems that against a background of a regulatory turf war and a battle for supremacy in the clearing house market, it is no wonder that the sector is experiencing such turbulence.

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: Navigating a Complex World: Best Data Practices in Sanctions Screening

5 November 2025 10:00am ET | 3:00pm London | 4:00pm CET Duration: 50 Minutes As rising geopolitical uncertainty prompts an intensification in the complexity and volume of global economic and financial sanctions, banks and financial institutions are faced with a daunting set of new compliance challenges. The risk of inadvertently engaging with sanctioned securities has...

BLOG

Rise of Data Products Excites Data Management Summit London

Squeezing the most value from data has become the key driver of data management innovation in the past few years. Among the tools garnering most attention in this quest is an approach that treats data as a consumer product. The theory is a simple one. By packaging datasets as well and data-centric services and products,...

EVENT

Data Management Summit London

Now in its 16th year, the Data Management Summit (DMS) in London brings together the European capital markets enterprise data management community, to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Regulatory Data Handbook 2025 – Thirteenth Edition

Welcome to the thirteenth edition of A-Team Group’s Regulatory Data Handbook, a unique and practical guide to capital markets regulation, regulatory change, and the data and data management requirements of compliance across Europe, the UK, US and Asia-Pacific. This year’s edition lands at a moment of accelerating regulatory divergence and intensifying data focused supervision. Inside,...