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The Resource for the Global Finance Profession

Implementation is the Hardest Part, a Letter from AFP's CEO

  • By Jim Kaitz
  • Published: 2010-12-22

Dear AFP Members,

For financial professionals, one of the biggest events of 2010 was the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act. Now the hard part will be implementation, with one of the most critical areas being the regulation and accounting for over-the counter (OTC) derivatives.

We know that many AFP members use interest rate and foreign exchange swaps in their daily business activities. So last month I wrote a letter to CFTC chairman Gary Gensler about OTC derivatives to reiterate AFP's position that these are essential tools that financial professionals rely upon to help stabilize prices and mitigate risk for their organizations

While we are pleased that the CFTC has pledged to protect a company's individual commercial risk mitigation practices, there are still opportunities for better coordination across regulatory bodies -- especially when it comes to hedge accounting rules for OTC derivatives.

AFP has been pleased to learn that the CFTC is committed to working with other agencies to ensure regulatory cohesiveness. Nevertheless, many AFP members continue to express concern about possible conflicts between derivative regulation and FASB's hedge accounting rules.

Clearly, the CFTC and FASB need to coordinate efforts so that end users of OTC derivatives are not adversely affected. You can read the full letter at www.afponline.org/cftc, and be sure to contact Jeanine Arnett, our director of government relations, with any additional concerns.

As always, we applaud regulation that will prevent excessive speculation and foster transparent derivatives markets.

Jim Kaitz
President and CEO
Association for Financial Professionals

Copyright © 2015 Association for Financial Professionals, Inc.
All rights reserved.

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