http://www.suntimes.com/business/roeder/1243213,curious-102608.article Lucrative deal in works of CME October 27, 2008 BY DAVID ROEDER Financial regulation in Washington is a jumble, as Congress and the bureaucrats kick around ideas for putting freewheeling credit default swaps under somebodyâs control. CME Group (CME), owner of the Chicago Mercantile Exchange and the Chicago Board of Trade, has center stage in the negotiations and is liable to benefit hugely from regulatory change. But nothing comes cheap in Washington. CME probably will win government blessing for its push to bring the $55 trillion credit default market under its wing. In return, it may need to give up two of its longheld lobbying views. As a tradeoff for collecting fees on these new contracts, CME probably will have to accept the Securities and Exchange Commission as its new overlord. It always wants to stay answerable to the Commodity Futures Trading Commission, a friendlier agency. The two went to bat for each other a little too eagerly in the controversy over speculatorsâ alleged role in high gas prices. As Congress drafts a new regulatory regimen, centralizing control of financial markets under the SEC looks logical and easy. Several members are talking that way, and SEC Chairman Christopher Cox gave that viewpoint a helpful push Thursday, endorsing a takeover of the CFTC. With that would come the second challenge for CME, a new futures transaction tax. The SEC funds itself with a securities transaction tax, so the proposal has a precedent. Besides, Congress will be casting about for ways to pay for that $700 billion bailout. Let Wall Street pay for its rescue. Accepting the tax will be a hard concession for the CME. But if the proposal comes out, CME should ask its big guns in the Illinois congressional delegation to withhold their fire. A new regulator and a new tax is a fair price for a license to enter a lucrative line of trading.
The current SEC fee on stock and options orders is laughable if they make it something like that for future it is a non issue. And if futures come under control of the SEC I would not care either.
I suppose an agreement on collecting tax on the CDS's would mean just having to tax all futures products. I chose my handle, FightTheFuture, as nothing to do with futures trading, but THE FUTURE, as in "the future sucks". The media keeps spewing out $700 billion, Wall Street must pay, when it could be near zero when it is done.
Some people watch too much TV. This bailout has nothing to do with traders. It's all about the bankers. Gotta fuck someone to pay for it, though. Guess it will be us.
What could get really interesting is if the SEC then goes after the many futures scam artists out there as they have done w/ a few stock jockies. Wonder what guys like Franz that used to be at TI would do then...
Personally, I'm more interested in PDT-like rules for futures. Since futures are (supposedly) riskier than equities, and by definition are derivatives, it is not unreasonable to think PDT minimum account size, if enacted, would be some multiple of existing equity PDT minimums. Gotta protect our children... build a 100-foot fence around the playground. Osorico
If they enact 25K rule for futures half this site won't be able to trade... Hehe I guess they will have to become position traders muhaha!
Perhaps... but a minimum account size doesn't need equate to a number or duration of trades. Just protect the children... the question is who are the children? The citizenry or the FCM/clearing firm? If something PDT-like is implemented, the answer is the FCM/clearing firm. Osorico