You see, we classified exchanges that would be subject to CFTC jurisdiction in a fair and logical fashion. We then proposed a level of regulation that would permit such exchanges to operate in a true business like fashion with sufficient oversight to protect any important national public policy concerns. The rest of the industry initially accepted the approach because it only seemed to apply to the traditional futures exchanges. But technology has changed everything. The traditional futures exchange was a brick and mortar edifice with shouting traders, milling clerks and flashing quote boards.
Modern exchanges are incorporeal.
It is now within the grasp of most financial institutions to acquire and operate trade execution systems that duplicate the trading function of exchanges. As a result, everybody seems poised to create an exchange or join and expand the operation of an existing exchange. There is a major story almost every day announcing a new alliance to operate an exchange or a quasi exchange. Foreign exchanges want to take a large share of the U.S. execution business. The same people who applauded the proposed level of regulation for the existing derivative exchanges are aghast that they would be subject to CFTC jurisdiction and regulation if they create their own electronic exchanges.