Thank you to Walt and the entire FIA team for inviting me here to speak at a very special FIA BOCA conference. This year, not only it is the 50^th Annual International Futures Industry Conference, but it is the CFTC’s 50^th anniversary since we were established by Congress as a Commission. It is an incredible honor to serve as the CFTC’s Acting Chairman during such a historic moment. I also want to thank my staff, Harry Jung, Meghan Tente, Brigitte Weyls, Taylor Foy, and Nick Elliot—I couldn’t have done this without you.

As you may know, I have attended nearly every FIA BOCA for the last 10 years, first as CFTC staff, then later when I worked at Citi and was an FIA member, and finally as a Commissioner and now Acting Chairman. I think I speak for all of us when I say that feeling of anticipation and excitement when you arrive here is because of the camaraderie and community—knowing that we will be all together with friends and colleagues for a few special days every year. It’s a testament to the work of FIA to create this unique community. 

For 50 years, FIA has been there every step of the way as a partner to the CFTC, ensuring that the futures and derivatives industry has a voice and can share their expertise and experience with our agency. FIA’s mission to “support open, transparent and competitive markets, protect and enhance the integrity of the financial system, and promote high standards of professional conduct”[1] helps the CFTC to achieve our statutory mission to provide oversight of “a system of effective self-regulation of trading facilities, clearing systems, market participants, and market professionals.”[2]

Promises Made, Promises Kept

Three years ago, I gave my first keynote speech as a Commissioner.[3] I said then that we all work for our clients and customers.  And we all know that client and customer relationships are built on trust. My client is the American taxpayer, and I work for the American people. I’ve been given the public’s trust, and it’s a responsibility I take very seriously. I’m humbled and grateful to continue to serve now as the leader of this agency, and work alongside my fellow Commissioners and the dedicated CFTC staff that are at the heart of who we are.

When I became Acting Chairman this year, I noted that for the past half century, the CFTC has proudly served our mission to promote market integrity and liquidity in the commodity derivatives markets that are critical to the real economy and global trade—ensuring American growers, producers, merchants and other commercial end-users can mitigate risks to their business and support strong U.S. economic growth. I also said it was time for the CFTC to get back to the basics.[4]

And so today, I will tell you how the CFTC is getting back to basics and what we’ll be focusing on under my leadership to deliver on my previous proposals and statements as a Commissioner. Promises made, promises kept.

Core Values: Mission, Markets, and Mindset

You all know that the CFTC has a regulatory framework that is based on core principles for futures exchanges and clearinghouses. I think it’s just as important that the agency has a culture of core values to unite us and guide us in our work. Integrity is the courage to speak the truth when all are silent, and it’s critical for the CFTC to focus not only on market integrity, but also in upholding integrity in all that we do.

When I became Acting Chairman, I said that we should focus on three M’s: Mission, Markets, and Mindset.

1. Mission: Is this our mission? Does this achieve our statutory objectives? Is it in the public interest?

2. Markets: Does this serve the markets? Will it promote well-functioning markets that are deep and liquid? Will it ensure market integrity?

3. Mindset: Are we approaching this with the right growth mindset? Are we open to new ideas and continuous improvement? Are we committed to excellence?

50^th Anniversary Awards Ceremony for CFTC Staff

To celebrate these core values, recognize the achievements of our talented staff, and commemorate our 50^th anniversary, I’m pleased to announce that the CFTC will have a special 50^th Anniversary Awards Ceremony next month to honor exceptional CFTC employees that exemplify Mission Excellence, Market Excellence, and Mindset Excellence. This will be in addition to the Chairman’s Honorary Awards which will be held later this year.

Management 101

So many in this room have worked with me at some point in my career, and know that when I was a managing director at Citi with global executive roles, I had responsibility across both institutional and consumer businesses and operations in 90+ countries and over 225,000 employees. My career trajectory and success was due to my track record in driving transformational change and delivering solutions.

In one of my roles where I oversaw a $1 billion dollar program involving over 1000+ employees, my team was responsible for executing over 150 significant change deliverables a year and running 15 enterprise-wide business-as-usual (BAU) processes. For over 5 years, I led global initiatives for Citi Markets and Securities Services across all asset classes—G10 Rates, FX, Local Markets, Credit, Securitized Markets, Municipals, Commodities, Equities, and Multi-Asset—including advising on and implementing global regulatory reform.

This background as an executive and operator is why my initial actions at the CFTC have focused on applying my management experience to return the agency to regular order and improve operational efficiency and effectiveness. 

As Acting Chairman, the first thing I did was ask all the Divisions and Offices to provide a list of all open and pending matters at the CFTC. This kind of list had not been created before, at least in recent memory. That exercise resulted in an inventory of over 200 open and pending matters, —some dating back over 10 years—and hundreds of investigations and enforcement matters—some dating back almost 15 years. Together with my executive management team, we have completed a review and prioritized all these open and pending matters.

In only about 6 weeks since I’ve been Acting Chairman, the CFTC has completed or addressed about a fifth of our open matters and dispositioned about a third of our open investigations. That’s real progress to transform the agency and improve the CFTC’s operational efficiency and effectiveness.

I have previously noted challenges with the CFTC’s internal governance, procedures, misconduct, and other issues.[5] New CFTC management has taken immediate corrective action to address these concerns as appropriate, including independent investigations and referrals to the Office of Inspector General where required. 

Implementing the President’s Executive Orders

Next, I will discuss the CFTC’s priorities during as my time as Acting Chairman. As with the rest of the federal government, the CFTC is implementing President Trump’s Executive Orders, which require the CFTC to address key issues that I had raised as a Commissioner: organizational structure,[6] lawful governance and enforcement,[7] and regulatory clarity.[8]

Organizational Structure

It has long been a priority of many CFTC Chairmen to achieve a shared goal of improving the CFTC’s operational efficiency and effectiveness. In May 2024, I called for a GAO study and recommendations to ensure the CFTC’s effectiveness.[9] By being more efficient, the CFTC will be more effective at accomplishing our mission and delivering value to the American taxpayer.

When it comes to organizational structure and functions, there are some improvements that the industry has long discussed with CFTC leadership that we now have an opportunity to accomplish. These are some of the ways that the CFTC is seeking to comply with Executive Order 14210. The CFTC is also considering other measures to achieve operational efficiency, such as by adopting a shared services model for administrative functions and support.

Market Surveillance

For at least over a decade, the Market Surveillance Branch was in the Division of Market Oversight (DMO). Currently, that unit is in the Division of Enforcement (DOE) and does not serve the CFTC’s mission to mitigate systemic risk. We will be looking at moving Market Surveillance from DOE back into DMO to improve the CFTC’s ability to monitor and respond proactively and more rapidly to market volatility, stresses, disruptions, or other dislocations. This improvement to our market oversight structure by returning Market Surveillance to DMO will assist the CFTC in ensuring well-functioning markets that are resilient.

In addition, the CFTC currently lacks a modern automated market surveillance system that can provide real-time alerts and perform cross-market analytics of both futures and swaps transactions to better identify potential trading activity involving fraud, manipulation, or abuse. Our current futures market surveillance system dates back to the 1990s and is antiquated. That is why I'm pleased to start the procurement process for the CFTC to obtain, for the first time, a real-time market surveillance system, which can be purchased off-the-shelf and which our regulatory counterparts around the world, including even in developing economies, already have.

FCM and DCO Oversight

One of the other improvements to the CFTC's organizational structure that has been often discussed is to return the oversight of futures commission merchants (FCMs) back together with the oversight of derivatives clearing organizations (DCOs), as it was for decades, including in the former Division of Clearing and Intermediary Oversight (DCIO). We will be looking at moving the FCM team from the Market Participants Division (MPD) back into the Division of Clearing and Risk Management (DCR) to better enable a holistic view of systemic risk in the clearing system across both FCMs and DCOs.

Lawful Governance and Enforcement

I have previously proposed many improvements to the CFTC’s internal procedures and processes for investigations, enforcement actions, and adjudications,[10] including amendments to Part 10 and Part 11 of CFTC regulations.[11] Since I became Acting Chairman, we have worked to implement many of these improvements to ensure lawful governance and enforcement pursuant to Executive Order 14219.[12]

I'm pleased to say that in accordance with my prior proposals and statements as a Commissioner, the CFTC has already released a new enforcement advisory on self-reporting, cooperation, and remediation that includes a first-ever matrix for mitigation credit (February 25 Advisory).[13] This new Advisory provides fair notice to the public and guidance that is designed to ensure due process in DOE’s investigations and enforcement actions.

I am gratified by the overwhelmingly positive response to the February 25 Advisory, which gets back to basics by returning to decades of prior CFTC policy on self-reporting and is aligned with best practices for assessing penalties followed by the Department of Justice and other U.S. financial regulators.

As I have stated, from the beginning, I have encouraged firms to self-report to proactively take ownership, ensure accountability, and prevent future violations. By making the CFTC’s expectations for self-reporting, cooperation, and remediation more clear, this Advisory creates meaningful incentives for firms to come forward and get cases resolved faster with reasonable penalties.[14]

Firms have been eager to know how the CFTC will apply the February 25 Advisory. I will address some answers to questions now, and we will be happy to further engage with various market participants or their counsel.

New Advisory on Enforcement Referrals by Operating Divisions

The CFTC will issue another new advisory soon to provide clarity on how material non-compliance issues will be referred from the operating divisions to DOE, per a footnote to the February 25 Advisory. It is now DOE policy that self-reporting will be permitted to not only DOE, but also to an operating division such as MPD, DMO, or DCR and still be eligible for self-reporting credit. 

I have observed in my past several years as a Commissioner that there has been inconsistency in how non-compliance issues are referred for enforcement action. Therefore, I believe that in order to provide fair notice and public transparency, the CFTC must establish and publish materiality criteria for an operating division to consider and use its sole discretion whether to refer a non-compliance issue to DOE.

These criteria will ensure that the operating divisions will appropriately address supervisory or compliance issues that are not material directly with the registrant or registered entity. Firms will have more clarity to determine whether to self-report a non-compliance issue to the operating division without undue concern regarding a referral for enforcement action.

This common-sense approach will facilitate open and transparent engagement by firms with operating divisions that will better achieve the CFTC’s oversight responsibilities and identify emerging issues, risks, or trends earlier.[15] It is based on my years of experience as a Global Head of Swap Dealer and Volcker Compliance at Citi, as well as my past work to enhance group-level policies and enterprise-wide procedures and processes for code of conduct, whistleblower matters, issue escalation and remediation, and self-reporting to regulatory authorities, including appropriate governance frameworks and management reporting.

In my view, the types of issues that may be appropriate for an operating division to refer to DOE would be material violations that involve willful misconduct or abuse; harm to clients, counterparties, or customers; or significant financial losses.[16] This is standard for self-reporting and escalation policies required by regulatory authorities in both the U.S. and all over the world.

Regarding material non-compliance issues with respect to risk management program or compliance program requirements, it is my view that a referral to DOE would be appropriate for a material non-compliance issue that involves especially egregious or prolonged systemic deficiencies, material weakness, or willful misconduct by management (which is typically already disclosed as a material non-compliance issue in an annual compliance report), if there is no material progress towards completion of a remediation plan for four or five years or more in the case of a large and complex financial institution. These are the types of material non-compliance issues that, after a sustained and continuous process with the operating division regarding lack of completion of remediation, may be appropriate for an operating division to refer to DOE.[17]

I hope that this provides some clarity regarding the CFTC’s forthcoming advisory on referrals by an operating division to DOE. Of course, firms should use their own judgment for when it may be appropriate to self-report a material violation—particularly those involving fraud, manipulation, or abuse—directly to DOE in the first instance.

New 30-Day Compliance and Remediation Initiative

Another question that has been raised regarding the February 25 Advisory is how the CFTC will determine civil monetary penalties (CMPs) and apply the mitigation credit matrix to an enforcement action. This topic has been the subject of much heated debate because over time, particularly in the last several years, the CFTC has drastically increased the amount of CMPs assessed against parties, sometimes 10 or 20 times more than historical CMPs in comparable cases.

That is why, in order to provide more clarity on how the CFTC will determine CMP amounts and apply the February 25 Advisory, I'm pleased to announce a new 30-day compliance and remediation initiative or enforcement sprint. This initiative involves review of the CFTC’s currently open investigations and enforcement matters regarding compliance violations, such as recordkeeping, reporting or other compliance violations without customer harm or market abuse.

The CFTC will seek to expeditiously resolve these matters in the next 30 days to conserve the CFTC’s resources and free up DOE staff to pursue fraudsters and scammers and seek recoveries for victims, whether through disgorgement, restitution, or other measures. Going forward, the CFTC will also seek to work more cooperatively with other authorities, both at the state and federal level, to leverage and scale our enforcement efforts and focus our limited resources on those victims that may have no other way to get help.[18]

This 30-day compliance and remediation initiative will establish the CFTC’s approach to and application of the February 25 Advisory.

Next Steps and Process for Settlements

For those firms that may currently be under investigation, subject to enforcement action, or engaged in DOE inquiries involving a material violation, in the next two weeks, please approach DOE staff, with a copy to Chuck Marvine, Acting Chief of the Retail Fraud and General Enforcement Task Force, and Brian Young, Director of Enforcement. Firms that provide a new self-report of a violation are also eligible to participate in this 30-day compliance and remediation initiative.

Firms should include at a minimum: (1) an update on remediation plans and progress towards completion, such as a presentation, white paper, or other submission, and (2) a reasonable settlement offer based on historical CMPs in comparable cases and application of the February 25 Advisory with the new self-reporting, cooperation, and remediation factors, together with the mitigation credit matrix.

In order to assess the CMP, the CFTC will take a more holistic approach that will look at CMPs over time, including over the last 10 years, not just the last few years.

Regulatory Clarity

Throughout my time on the Commission, I have consistently maintained that there must be clear rules of the road for market participants. I believe that markets work best when there are clear and simple rules with common standards.[19] That is why it is a priority for me as Acting Chairman to focus on providing regulatory clarity and implementing Executive Order 14219. 

As one of my first leadership actions, I announced a series of public roundtables on evolving trends and innovation in market structure to engage with industry leaders, market participants, other market structure experts, and public interest groups.[20] As I have long maintained, it is essential for the CFTC to have open public engagement and increased transparency on its policy approach to changes in derivatives markets to establish clear rules of the road and safeguards that will promote U.S. economic growth and American competitiveness.

Oftentimes, issues due to a lack of regulatory clarity have been both well-known and longstanding before the Commission. For example, in 2017 during the first Trump Administration, the CFTC requested public input on simplifying and modernizing CFTC rules and received numerous comment letters.[21] The CFTC is reviewing these 2017 submissions to see which are still open issues that can be addressed now, many of which involve the CFTC’s swaps regulations and cross-border treatment.

Potential issues include FX products and substituted compliance for non-U.S. swap dealers. There is also much confusion regarding definitions and registration requirements due to the CFTC’s regulation by enforcement approach, including for designated contract markets (DCMs), swap execution facilities (SEFs), commodity trading advisors (CTAs), and FCMs.

The CFTC is also reviewing recommendations from advisory committees, such as the CFTC’s Global Markets Advisory Committee which I sponsor.

Digital Assets

Last week, I was honored to participate in the historic White House Digital Assets Summit as a member of the President’s Working Group on Digital Asset Markets. I also hosted the CFTC’s first Crypto CEO Forum, which was a wide-ranging discussion about the future of crypto in the U.S. and demonstrates the CFTC’s commitment to engagement with all stakeholders on market innovation.[22] We will also be looking to hold discussions over the next coming weeks with key stakeholders to gather information regarding a potential digital asset markets pilot program for tokenized non-cash collateral.

Prediction Markets

With respect to prediction markets, the Commission is currently deliberating whether to reopen the comment period for the 2008 Concept Release on the Appropriate Regulatory Treatment of Event Contracts.[23] At the time the Concept Release was published, the CFTC was evaluating markets commonly referred to as “event, prediction, or information markets.” Of the two dozen questions posed in 2008, all remain relevant today, particularly questions regarding the public interest in information aggregation and price dissemination, and the utility of information markets.

I have announced that the CFTC will host a prediction markets roundtable, currently likely to be held at the end of next month.[24] As I stated then, the CFTC is required to follow the rule of law and the Administrative Procedure Act to change course on the regulation of event contracts. This roundtable is a necessary first step in order to establish a holistic regulatory framework that will both foster thriving prediction markets and protect retail customers from binary options fraud such as deceptive and abusive marketing and sales practices. The prediction markets roundtable press release identifies a number of key issues regarding CFTC regulation of event contracts, and requests public feedback, suggestions, and requests to participate as panelists. The submissions from the public are available on the CFTC’s website.[25]

I believe that by reopening the 2008 Concept Release comment period, the Commission can ensure that there is a public comment file in connection with the forthcoming prediction markets roundtable, and further build a robust administrative record spanning over 30 years with studies, data, expert reports, and public input from a wide variety of stakeholder groups. I hope that the Commission will vote to reopen the comment period shortly.

Conclusion

Last month, I asked my fellow Commissioners to join me in an agency-wide message to our staff. This is for them:

Thank you to all our staff for your dedication to public service and to the CFTC. During these changing times, it’s important for the Commission to take a moment to recognize each of you for your commitment to the CFTC. 

Our agency has a proud history steeped in our unique principles-based regulatory framework that enables markets to provide the price discovery and risk management that is critical to the U.S. and global economy. Through every evolution of the markets, the CFTC has remained nimble to promote responsible innovation and fair competition, mitigate systemic risk, and prevent fraud, manipulation, and abuse.

Our agency has been able to do this because we are one team that is focused on our shared mission to ensure the integrity of the $700 trillion notional global derivatives markets. No matter what, we are all in this together and support one another.

The CFTC’s outsize impact on the lives of everyday Americans is a testament to our people who make this agency what it is. I am grateful for your hard work and how much you believe in our mission. As one team, we will keep writing new chapters in the CFTC’s history as we look to the future for the next 50 years.