Good afternoon.

Thank you to Commissioner Goldsmith Romero, Tony Biagioli, the Designated Federal Officer, and all of the members for today’s meeting of the Technology Advisory Committee.

Today’s discussions on cybersecurity, decentralized finance, and artificial intelligence are incredibly timely and important to the mission of the CFTC.  I thank Commissioner Goldsmith Romero for her leadership in tackling these issues with renowned technical experts.  And I thank all the guest speakers and members who are willing to share their time and experience with us today. 

In light of the ongoing shocks and disruptions to markets, I would like to focus these brief remarks on operational resilience.

I think it is important to note that for many years now, both policymakers as well as the private sector have identified and recognized the vital need for operational resilience[1] in our financial system, and I support this for both financial institutions as well as financial market infrastructures.  The Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO), and regulatory authorities around the world have done significant work to strengthen operational resilience and identify vulnerabilities.  The CFTC is actively engaged in these international efforts.

As noted by U.S. prudential regulators in 2020, operational resilience encompasses governance, operational risk management, business continuity management, third-party risk management, scenario analysis, secure and resilient information system management, surveillance and reporting, and cyber risk management, and I’m pleased we are focusing on these risks today.

Among our various registered entities and registrants, the CFTC has direct oversight over both U.S. and non-U.S. global systemically important banks (G-SIBs) registered as swap dealers, as well as three systemically important financial market utilities (SIFMUs) that are registered with the CFTC as derivatives clearing organizations.  You can see that the CFTC has a critical role in ensuring financial stability and mitigating systemic risk.

Establishing and maintaining a robust regulatory framework to manage the risks that are part of ensuring operational resilience is core to our mission, and both the CFTC and our partner, the National Futures Association (NFA), have rules that are already on the books.  Many of the recent disruptions, including ION Trading, are addressed in these regulatory requirements.  Accordingly, I believe we must examine and address compliance failures under our existing rules, as well as considering whether additional regulation is necessary.

I look forward to hearing today’s panel discussions and continuing our public engagement on these topics.  Thank you.