Thank you, Chairman Schapiro. First, I want to join you in thanking the staff, and particularly the staffs of the Divisions of Trading and Markets and Corporation Finance, for their hard work on this release. While Dodd-Frank's rulemaking burden is a challenge for the Commission generally, joint rulemakings such as this one, which has required many months of coordination and negotiation with the CFTC, are particularly challenging. Today's proposal is a testament to the diligence, expertise, and diplomatic skill of our staff, and I commend them again for their efforts.
In thinking about this rulemaking, the overriding objective should be to provide clarity and regulatory certainty to the greatest degree possible to both market participants and regulators. That means, first, that we be clear about what products are regulated as swaps or security based swaps under Dodd-Frank and what products are not. Second, that within the universe of regulated swap products, we are clear about which are swaps regulated by the CFTC and which are security based swaps regulated by the Commission. And third, as to the category of mixed swaps, which are jointly regulated by both the CFTC and the SEC, that we provide clear rules of the road as to how the agencies will regulate these products.
Further, as the release notes, while the statutory definitions of swap and security based swap are quite detailed, if not further defined clearly, they could raise uncertainty over the treatment of many types of agreements, contracts and transactions clearly not intended to be regulated as swaps or security based swaps by the law.
What we need to strive to avoid is a rule set that leaves the status of many products unclear, and where the resulting regulatory uncertainty will raise costs for market participants, potentially discourage the development of new products, and focus regulatory energies on questions of treatment, jurisdiction and turf rather than on effective regulation of the swaps markets.
Today's release reflects a considered effort to draw these lines as clearly as possible, and we have benefited tremendously already in crafting this release from comments received during the Advanced Notice of Proposed Rulemaking. I urge commenters to carefully consider whether the proposed rule effectively and appropriately draws these lines and provides the necessary clarity we seek. I have no questions, and support the rule proposal today.