Futures exchange operators are wary that financial market regulators may overreach in their effort to address the 2008 financial crisis, resulting in more restrictive rules that will hinder growth in derivatives markets.

Market authorities must bear in mind the potential costs and benefits of new rules around trading and clearing derivatives contracts, and take care not to do "damage to the industry," said Craig Donohue, chief executive of CME Group Inc. (CME).

"It's a fundamental concern that in the rulemaking process, are the [Commodity Futures Trading Commission] and other agencies sticking to what Congress intended and not using this as an opportunity to legislate and get into areas well beyond the intentions of Congress," Donohue said, speaking Wednesday at an event hosted by the Futures Industry Association.

Garry Jones, head of derivatives business for NYSE Euronext (NYX), raised concerns around a potential "lack of focus" among regulators and the danger that they may be focusing on issues not intrinsic to the root cause of the financial crisis.

Exchange officials remained wary that rules being crafted in the U.S. and Europe won't closely match, encouraging some market participants to shift their business to one jurisdiction or the other to avoid more strict regulations.

CME's Donohue said that "a substantial risk" of such regulatory arbitrage remains, despite high-level agreements on general terms of financial markets overhaul among G20 nations.

"All of us firmly are in the camp of endorsing an even regulatory playing field," said Andreas Preuss, CEO of Eurex, the derivatives arm of Deutsche Boerse AG (DB1.XE).

Magnus Bocker, CEO of Singapore Exchange, said he believes long-term regulators will harmonize their approach to rules-making across venues.

-By Jacob Bunge, Dow Jones Newswires; 312 307 4879; jacob.bunge@dowjones.com

 
 
CME (NASDAQ:CME)
Historical Stock Chart
From May 2024 to Jun 2024 Click Here for more CME Charts.
CME (NASDAQ:CME)
Historical Stock Chart
From Jun 2023 to Jun 2024 Click Here for more CME Charts.