My testimony today focuses on the desirability of legal certainty for the OTC derivatives markets and the need to assure that securities derivatives such as single stock futures do not undermine investor protection and market integrity. The OTC Derivatives Report contained several recommendations related to legal certainty for OTC derivatives products. The enormous size of the OTC derivatives market 2 demonstrates its critical role in our capital markets.
Derivatives contracts play a crucial role in risk management for a vast array of businesses.
Accordingly, I can think of few more important issues for Congressional consideration than legislation to implement the recommendations by the Working Group to give legal certainty to the OTC derivatives market. The Commission reiterates its strong support for implementation of the recommendations by the Working Group related to legal certainty for OTC derivatives. After studying the issues, the Working Group unanimously concluded that the CEA was not the appropriate framework for certain OTC derivatives. In addition, the Working Group determined that steps needed to be taken to ensure that the CEA did not stifle the natural development of these markets. For a more detailed discussion of the Working Group's recommendations, I refer you to my earlier testimony.