Statement of Commissioner Brian D. Quintenz on the End of His Term and Future Plans
April 28, 2020
I am deeply honored to have served as a Commissioner at the Commodity Futures Trading Commission over the last two and half years, as well as to have been a part of an administration that has assembled one of the best financial regulatory teams across the federal government. My five-year statutory term as a Commissioner expires this month. With its expiration, I have had an opportunity to reflect on my journey. It has been a privilege to serve my country in this role, easily the most rewarding experience of my professional career. However, after thoughtful consideration and much discussion with my family, I have decided not to seek re-nomination to another five-year term as a Commissioner. With five years having passed since I was first selected for this role, it is time for me to pursue new challenges and opportunities.
Since joining the agency, I have strived to build my Commissionership on three broad themes: ensuring the Commission is focused on risks, with rules appropriately tailored to those risks; embracing the rapid advancement of technology and innovation in finance; and working for enhanced coordination and deference among domestic and international regulators.
One of my top priorities as a Commissioner has been to ensure that the CFTC focuses its expertise and resources on identifying risks in our derivatives markets and developing targeted, appropriate responses to those specific risks—as opposed to prior approaches which, too often, imposed one-size-fits-all regimes. From calling for an overhaul of the swap dealer de minimis threshold, to tailoring the re-proposal of the swap dealer capital rule, to changing the CFTC’s proposed approach to cross-border swap dealer regulation, to opposing the ill-conceived Regulation Automated Trading, I am proud to have played a positive role in promoting sound regulation.
I’ve been particularly honored to sponsor the CFTC’s Technology Advisory Committee (TAC), where we’ve had the opportunity to explore the extraordinary technological renaissance transforming our financial markets. During my term, the agency has overseen the listing of Bitcoin futures contracts, the custody of digital assets within the traditional clearing infrastructure, the proliferation of blockchain technology, and the creation of crypto-graphic, tokenized commodities. In addition, the TAC and its subcommittees have explored the evolution of state-of-the-art risk control mechanisms at exchanges and firms, cryptographic proofing mechanisms, digital asset trading platform self-regulation standards, and scalable cyber-security programs.
While the CFTC is a domestic regulator, the markets we oversee are global in nature. During my tenure, I have traveled extensively overseas, meeting with authorities and financial institutions to discuss the international impact of financial regulations on commerce. I have long advocated for authorities across the globe to adopt a deference-based regulatory framework that respects other jurisdictions’ supervisory interests in regulating their own local markets. I am proud to have helped craft the Commission’s proposals regarding the treatment of non-U.S. derivatives clearing organizations (DCOs), including the conditions under which they may seek an exemption from registration or registration with alternative compliance, as well as the recent proposal codifying the cross-border regulation of swap dealers, all of which are grounded in deference.
In addition, I have worked to harmonize financial market rules across agencies. The Federal Reserve Board recently finalized a revised approach to its supplemental leverage ratio which removed initial margin from the calculation, a reform which I have long advocated. I am also incredibly fortunate to have worked closely with Securities and Exchange Commission (SEC) Commissioner Hester Peirce on coordinating and harmonizing rules, processes, and overlapping jurisdictional issues between our agencies. The SEC’s finalized capital, margin, and segregation rules for broker-dealers and security-based swap dealers was a crowning achievement of that work. I am grateful to SEC Chairman Jay Clayton for prioritizing harmonization efforts and finalizing Title VII rules, and I am especially grateful to Commissioner Peirce for her thoughtful advocacy, extensive communication, extraordinary productivity, and personal friendship.
I am incredibly proud of the regulatory philosophy I articulated, the policy agenda I promoted, and the relationships I built over the last two and a half years.
I am eternally grateful to President Trump for his nomination and appointment, as well as to Senate Majority Leader Mitch McConnell for his recommendation. The agency has been fortunate to have enormously dedicated public officials leading our committees of jurisdiction over the last number of years, including Senate Agriculture Chairman Pat Roberts and Ranking Member Debbie Stabenow, House Agriculture Chairman Collin Peterson and Ranking Member Mike Conaway, and House Agriculture Subcommittee Chairman David Scott and Ranking Member Austin Scott. It has been a true pleasure to work with them and their staffs, as well as visit each of their states and districts. I am also fortunate to have served alongside two fantastic CFTC Chairmen, Chris Giancarlo and Heath Tarbert, as well as my fellow commissioners Russ Behnam, Dawn Stump, and Dan Berkovitz. Lastly, I would like to thank my staff, Kevin Webb, Margo Bailey, and Peter Kals, without whom these accomplishments would not have been possible. They are simply the best attorneys in the business, enormously respected within the agency, wonderful individuals, and close friends.
I recognize that the departure of a Commissioner, especially if it impacts the political and philosophical weighting of the Commission, may create uncertainty among market participants, increase the unpredictability of policy direction, and stymie important work. In particular, there are several critical rulemakings before the Commission about which I care deeply, have had a strong hand in developing, and wish to see finalized. As such, I plan to stay in my role until the earlier of the confirmation of my successor or October 31, 2020.
In sum, I am very proud to have played a role in promoting the integrity of the U.S. financial system through the development of sound, risk-focused regulation so that U.S. financial markets, especially the risk-hedging, derivatives markets, remain the most liquid, accessible, robust, and resilient in the world. The proof of that resiliency is evident in the derivative markets’ performance over the course of the last two months in the face of unprecedented volatility, margin calls, and trading volume due to the COVID-19 crisis. The extraordinarily dedicated and talented CFTC staff, as well as exchange operators, intermediaries, and market participants, should be proud of these results. During my remaining tenure as a Commissioner, I look forward to continuing this important work on behalf of the American people.