Public Policy Questions Raised by Regulatory Reform Efforts for Exchange Traded Derivatives

Appendix II

Regulatory Reform Efforts for Exchange-Traded Derivatives

Financial Integrity/Systemic Risk:

Public Policy

Questions Raised by

1. How do the financial integrity/systemic risk issues posed by the

Regulatory Reform

exchange-traded derivatives markets differ from those of the OTC

derivatives markets, and what are the regulatory implications?

Efforts for Exchange-

Traded Derivatives

Market Integrity/Efficiency:

2. How are the risks posed by financial futures and options different from

those of physical commodities (e.g., as they relate to price discovery

and market manipulation); and what are the regulatory implications?

3. What are the implications of a regulated and unregulated exchange

market operating side-by-side for the same or different contracts?

4. What are the major risks, if any, that threaten the integrity and

efficiency of a futures market limited to sophisticated market

participants, and what are the regulatory implications of any such

risks?

5. To what extent can the costs and benefits of futures market

regulations be measured in an objective, consistent, and reliable

manner that allows for a meaningful comparison between them?

6. How should the terms futures contract and board-of-trade be defined,

if at all, in the CEA?

7. What is the appropriate role for CFTC in approving new contracts

proposed for trading by a futures exchange?

Customer Protection:

8. How do the customer protection issues posed by the exchange-traded

derivatives markets differ from those of the OTC derivatives markets,

and what are the regulatory implications?

9. How do the customer protection issues differ between tiers in a market

differentiated by the sophistication of market participants, and what

are the regulatory implications?

10. Absent CFTC regulations, what protections exist or should exist for

OTC market participants?

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