July 29, 2019

ICYMI: Chairman Tarbert Lays Out Priorities in Fox Business Op-Ed

Excerpts from FoxBusiness.com

“… Instead of taking the ‘ready, fire, aim’ approach all too common in Washington, I am building the CFTC’s agenda with an open mind.  In addition to combating fraud, abuse, and manipulation, I am thinking carefully about two sets of issues: resolving unfinished business and preparing for the unwritten future …

“[W]e are closely monitoring Brexit.  Brexit will result in Europe’s largest financial hub leaving the EU with the likely consequence of European authorities losing jurisdiction over London-based CCPs.  The EU recently passed legislation to retain that oversight.  However, if misapplied, the law could direct foreign regulators to rewrite the rules for American CCPs.  Despite the hyper-partisanship in Washington, there is virtual bipartisan unanimity that such an outcome would be a non-starter …

“[T]he CFTC must issue long-awaited rules to limit derivatives positions that help unscrupulous traders corner commodity markets.  The trick will be making sure these rules do not strip those markets of the flexibility needed to perform their fundamental risk-management functions …

“Technological innovations such as blockchain hold great promise, and the rise of digital ‘currencies’ has created a new asset class.  Working with our counterparts, the CFTC must develop a holistic framework for these 21^st-century commodities. We must also keep a weather eye against emerging threats, especially cyber risks.  Protecting against these risks, which includes protecting confidential trading data, is a top priority of the CFTC as well as the firms and exchanges we regulate.  

“How we regulate is just as important as what we regulate … Reinvigorating our historical principles-based approach, where appropriate, will help our markets remain fair, innovative, and vibrant.

“In leading the CFTC, I will not lose sight of the underlying purpose of our derivatives markets: to serve the needs of everyday Americans … In regulating these financial instruments, the CFTC serves as a guardian of our free-enterprise system.

“Financial regulators are rarely applauded in the media, let alone discussed around the dinner table. Obscurity may dishearten some, but it is also a measure of the agency’s historical success.”