Comment Text:
Regarding the request for comment on the Impact of Affiliations of Certain CFTC-Regulated Entities,
as the CFTC states rightly at the beginning of their request letter,
"An affiliation between an intermediary or other market participant and a [designated contract market] DCM, [derivatives clearing organization] DCO or [swap execution facility] SEF raises questions as to how these supervisory responsibilities will be carried out with respect to the intermediary or market participant. In addition, an affiliation between an intermediary or market participant and a DCO, DCM or SEF may raise other potential concerns including possible anti-competitive effects, treatment of nonpublic information, and the adequacy of the applicable financial resources."
And there are indeed great and I would argue insurmountable shortcomings of the close affiliations of these different market participants. Many problems of the current market structure result from a too close association of different market participants, such as insider trading, problems in risk management and a trading environment that is detrimental for retail traders. Hence, an even higher degree of consolidation by e.g. allowing DCOs and their futures commission merchants to be owned by the same parent companies is only destined to worsen the condition of the US stock market even further. I hence advocate for not implementing this new regulatory framework in its entirety.
Best regards,
P.
