MFX Letter to CFTC on behalf of Microfinance Industry
In the aftermath of the financial crisis the US Congress passed broad new financial legislation –the Dodd-Frank Act – which, among other reforms, provides for a new regulatory framework for derivatives. The goal of the legislation is to 1) increase the level of reporting in derivatives markets, 2) where possible to push over-the-counter derivatives to clearing houses, and 3) increase collateral and capital requirements. All of these measures are designed to decrease systemic risk so as to avoid a repeat of the events of 2008.
MFX has made its case to the CFTC in writing and in person that it should not be subject to the regulatory provisions that would undermine its business model. The CFTC staff is quite supportive of our case though has limited authority to make one-off exceptions. The MFX board feels that to further support our case it is important that we highlight the importance of MFX’s mission to support microfinance and the microfinance industry’s role in poverty alleviation. The following letter is designed to be an open letter to the CFTC chairman from members of the microfinance community to show support for MFX’s position that it should not be subject to the full level of regulation under the statute which could potentially impair the MF industry’s ability to manage its currency risks.
Click here to view the text of the letter. If your organization is willing to sign the letter please contact us