Statement of Chairman Timothy Massad before the CFTC’s Energy and Environmental Markets Advisory Committee

February 25, 2016

Thank you. Let me also welcome all of you, and thank you for taking the time to be here today.

The Energy and Environmental Markets Advisory Committee, and all of our advisory committees, are very important to the work of the Commission. They provide us with a lot of useful input. I’d like to thank Commissioner Giancarlo for hosting this important meeting and for all of his work with respect to this Committee. As many of you know, organizing each advisory committee meeting takes a lot of hard work, and I thank Chris and his staff for all that went into today’s event.

I also thank Commissioner Bowen for being here today, and for bringing that same enthusiasm to her leadership of our Market Risk Advisory Committee.

Since taking office, all of us have been focused on making sure we are addressing the concerns of commercial end-users, who rely on the derivatives markets to hedge routine commercial risk. We have taken a number of steps to fine-tune our rules in this regard, and our advisory committees and other sources of input from market participants have been very helpful in this effort. And so I look forward to today’s discussion in particular, because it affords another opportunity for us to hear from commercial users of these markets.

Today’s agenda covers a number of important issues, as Commissioner Giancarlo has described. In the interest of getting to our discussion, I’ll just say a word about one of them.

Today we will discuss the Commission’s preliminary staff report on the swap dealer de minimis exception. This is an important report, and is perhaps the most practical example of how far we have come in our efforts to increase and improve data reporting. As we make clear in the report, the data is far from perfect. But we have a lot more data today than we did when the Commission and the SEC first wrote the joint rule defining swap dealers.

There’s a lot of work going on to enhance the quality and consistency of the data, which I have talked about elsewhere. In fact, our chief information officer is testifying about this issue on Capitol Hill as we speak. But undoubtedly, our ability to assess exposures in this market has improved dramatically from 2008. And market participants have greater price information as a result of the real-time reporting that is now in place.

The preliminary staff report takes a fresh look at the de minimis threshold. The report does not make a recommendation as to what the de minimis level should be. It instead explores the relevant issues, and invites public comment.

Today’s meeting is an important opportunity for us to receive that feedback. We will carefully consider the perspectives we hear today – as well as the views of the many others who have weighed in on this report. Then, CFTC staff will produce a final report, and the Commission can decide how to move forward.

I look forward to today’s discussion and I again thank all of you for taking the time to provide the Commission with the benefit of your perspective.

Last Updated: February 25, 2016