Opening Remarks of Michael V. Dunn
Commissioner, Commodity Futures Trading Commission
Hearing on Self-Regulation in the U.S. Futures Industry

February 15, 2006

Washington, DC

Good morning. I would like to thank the Chairman for scheduling this hearing today. I believe that this hearing signals an era of openness and transparency at the CFTC, and I commend the Chairman for taking this step. I would also like to thank all the distinguished panelists and guests for being with us today.

It is important for the health of our industry that we have this public conversation today regarding the governance of the industry’s self-regulatory system. The industry has always been dynamic and, since the adoption of the CFMA, we have seen tremendous growth and change. SROs, themselves, are undergoing an evolution in their structures.

The reliance on self-regulation in the futures industry reflects a belief that ensuring the integrity of futures markets can best be accomplished thru allowing organizations with firsthand industry experience to assume the lead role. These self-regulatory organizations, guided by general principles set out by the CFTC, have shown themselves to be well-qualified to protect the integrity of futures markets.

Our task is to ensure that an adequate firewall exists between the market and regulatory functions of an SRO. We have received many comments, through a number of venues, expressing differing opinions on how to best accomplish this. Questions raised include: the definitions of outside and independent directors; the structure and authority of SRO functions, and the openness and transparency of self-regulatory processes to the public.

At the end of this process, I hope we have a framework that inspires continued confidence in the self-regulatory system, helps ensure market integrity and consumer protection, adapts to the needs of an ever-changing industry, and allows an SRO flexibility in meeting their responsibilities.

I look forward to the guidance, wisdom, and lively exchange of ideas that we will receive today. Again, I want to thank all of you for your participation.

Last Updated: April 2, 2007