WASHINGTON – Commodity Futures Trading Commission chairman Gary Gensler this morning called for broad regulation of all over-the-counter derivatives dealers and markets, including non-standardized interest rate swaps and other derivatives products in the municipal market.

Speaking before the Senate Agriculture Committee, Gensler said that dealers should be subject to reporting and recordkeeping requirements, as well as business conduct standards and capital and margin requirements.

“I believe that we must urgently enact broad reforms to regulate over-the-counter derivatives,” he said, stressing that these “should apply to all dealers and all derivatives,” including interest rate swaps in the financial markets and customized as well as standardized products.

Regulators should have a clear picture of the derivatives markets and should be able to police and monitor them for fraud and abuse, Gensler told the lawmakers.

Committee chairman Tom Harkin, D-Iowa, said he could not understand what customized derivatives are and why they cannot be traded on exchanges.

Gensler responded, “Individual commercial entities and municipalities sometimes want to tailor a specific product.”

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