Yesterday the Obama Administration proposed a bill named the “Over-the-Counter Derivatives Market Act of 2009″. The bill proposes to amend a number of securities laws to aide in regulation of the OTC derivatives market.

The proposed legislation will force the OTC derivative markets (including CDS and all other OTC derivative markets) to be subject to comprehensive regulation in order to:

• Guard against activities in those markets that pose excessive risk to the financial system
• Promote transparency in those markets
• Prevent market manipulation, fraud, insider trading, and other market abuses
• Block OTC derivatives from being marketed to “unsophisticated” investors

The regulation will be obtained by:

• Require central clearing and trading of standardized OTC derivatives
• Move more OTC derivatives into central clearing and exchange trading
• Require Transparency for all OTC derivative markets
• Extend the scope of regulation to cover all OTC derivative dealers and other major participants
• Bring robust and comprehensive prudential regulations to all OTC derivative dealers and other major participants
• Provide the CFTC and SEC with the tools and information necessary to prevent manipulation, fraud and insider trading
• Better protection for “unsophisticated” investors through a more robust definition of eligible investors

Archway is dedicated to providing you with the most current regulatory updates. If you would like to find out how Archway can ease the burden of compliance, please do not hesitate to contact Mike Landis (317)819-5483 or Drew Alexander (317)819-5501.