Comment Text:
I firmly take the perspective of Chairman Christy Romero's comment posted at the following link.
https://www.cftc.gov/PressRoom/SpeechesTestimony/romerostatement062823
The potential new vertical integration of clearinghouses with the customer facing intermediaries will not promote market stability, investor protection, or reduced market risk. This new regulatory framework should not be implemented under any circumstances. It only serves to hand over the ability of substantially more risk and leverage to a vertically integrated (see: monopoly) clearinghouse, with a significant reduction in seeing both the level of risk and the ability of a naturally occurring disciplinary feedback mechanism to be in place.
Again, this new market structure and regulatory proposal should not be implemented in any fashion.
A quote from Romero's comment is especially prescient: "Our clearinghouse rules were not set up to protect customers, because they were written with the idea of a separate intermediary that interacted with customers and had regulatory obligations for customer protections."
Christy Romero, a Commissioner at the CFTC, wrote the piece at the link you just clicked on. (Hint: Click the link!). It addresses the concerns and risks posed by this request. I highly recommend reading it in full. I personally quoted about half of her post when articulating my concerns with the proposal.
She points out in a very professional manner that "this is the absolute dumbest shit the CFTC could pull and pretty much puts power in a single entity that can do endless crime. Also, this is what FTX was and I actually spoke about the risks posed from an entity like FTX shortly before they collapsed."
It's an excellent read, and quintessential to understanding the extent of the risks from this new proposed market structure.
