President Donald Trump may have his sights set on deregulation but a full repeal of title VII looks unlikely -

One might think that the stated intention of US president-elect Donald Trump and Republicans in the US Congress to roll back the DoddFrank Act means that the Trump administration is likely to substantially reduce the regulation of derivatives under title VII of Dodd-Frank. It is early in the day, and the policies of the president-elect may be unpredictable. However, there are reasons to believe that his administration’s approach to modifying derivatives regulation may rely more on the scalpel than on the sledgehammer. Among those reasons are the international basis for many of the primary derivatives markets reforms, the paucity of changes to title VII contained in the draft bill that Republicans are touting to amend Dodd-Frank, and the apparent views of Commodity Futures Trading Commission (CFTC) Commissioner J. Christopher Giancarlo, who has been identified as the frontrunner to chair the CFTC under the Trump administration.

Title VII of Dodd-Frank brought about unprecedented regulation of the derivatives markets. The aims of the Title VII reforms included reducing systemic risk (by requiring margin and mandatory clearing for many transactions), increasing market transparency (by requiring transaction reporting and requiring swap dealers to register with the CFTC), and levelling the playing field for market participants (by requiring dealers to adhere to business conduct standards and to execute many transactions on facilities capable of providing pre-transaction price transparency).

Originally published in International Financial Law Review on February 10, 2017.