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This just in 23 Sept.:

By Judith Burns

WASHINGTON (Dow Jones)--U.S. Securities and Exchange Commission Chairman Christopher Cox is asking Congress for new authority to regulate the credit-default swaps market, calling it a "regulatory hole" with the potential to pummel stocks and roil markets.
In testimony prepared for delivery to the Senate Banking Committee on Tuesday, the SEC chief sounded alarms about the unregulated and growing market in credit-default swaps, which now has $58 trillion of notional debt outstanding.
Credit-default swaps, a kind of insurance, are meant to protect lenders from borrowers who don't repay. Swaps buyers don't need to own the debt to get default protections, and Cox warned that this means there are no restrictions on their ability to "naked short" corporate debt.
"This potential for unfettered naked shorting and the lack of regulation in this market are cause for great concern," Cox said in his prepared testimony. He asked that any legislation overhauling U.S. financial regulation include changes that give the SEC authority to regulate credit-default swaps.
The SEC needs such authority because swaps aren't defined as securities, making them off limits for the federal securities regulator.
-By Judith Burns, Dow Jones Newswires; 202-862-6692;

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