The head of the main US derivatives regulator on Thursday set out a 100-page blueprint to pare back regulation of the swaps industry that was introduced after the financial crisis, calling it a software upgrade for the rules rather than an attempt to “burn down the house”.

Christopher Giancarlo, chairman of the Commodity Futures Trading Commission, said that small banks should be exempt from collecting margin payments on over-the-counter swaps and that regulators should give banks more leeway to use their own internal models.

The white paper penned by Mr Giancarlo and Bruce Tuckman, the CFTC’s chief economist, contains a mix of short-term policy proposals and longer-term goals for reform of the rules governing swaps, derivatives contracts in which traders exchange financial instruments.

Mr Giancarlo said he would prioritise an overhaul of swaps execution rules, which he has long argued are too restrictive. He said that the Obama-era CFTC inadvertently pushed the trading of certain swaps into less-regulated parts of the market by being too specific about how execution platforms should operate.

The CFTC chair, a former executive at interdealer brokerage GFI, proposed allowing the platforms to operate more flexibly while also forcing a wider range of swaps on to the platforms. He said he would introduce new rules later this year.

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