CFTC Acting Chair J. Christopher Giancarlo called for the CFTC to "reinterpret its regulatory mission" by (i) fostering economic growth, (ii) enhancing U.S. financial markets, and (iii) "right-sizing its regulatory footprint." Acting Chair Giancarlo delivered his remarks before the 42nd Annual International Futures Industry Conference, on the day after President Donald J. Trump announced his intention to nominate Mr. Giancarlo as CFTC Chair (see previous coverage).
In his speech, Mr. Giancarlo called for an end to the "overly prescriptive regulation of the American derivatives markets," which he asserted are now "more fragmented, more concentrated, less liquid, and less supportive of economic growth and renewal than in the past." Mr. Giancarlo noted that he is not opposed to Title VII of Dodd-Frank (in which, he maintained, "Congress got much right"), but rather with the CFTC's implementation of the market reforms.
Acting Chair Giancarlo stated that the CFTC should foster economic growth by:
- reducing regulatory burdens through initiatives like "Project KISS" ("Keep It Simple, Stupid"), designating his chief of staff as the CFTC Regulatory Reform Officer, and reviewing all CFTC rules in order to reduce regulatory burdens and costs for participants in markets under CFTC oversight;
- becoming a "smarter regulator" by restructuring agency surveillance organizations and appointing a Chief Market Intelligence Officer who will report directly to the CFTC Chair; and
- embracing financial technology ("fintech") by adopting a "do-no-harm" approach and reviewing agency treatment of fintech innovation.
Acting Chair Giancarlo also asserted that the CFTC should enhance financial markets by:
- "calibrating bank capital charges for economic growth" as a voting member of the Financial Stability Oversight Committee;
- reforming the CFTC's "flawed swaps trading implementation" with a "better regulatory framework for swaps trading" that allows market participants to select the manner of trade execution best suited to their needs, rather than having specific types "chosen for them by the federal government"; and
- improving coordination with global regulators through measures while "fully embrac[ing] the Trump Administration's Executive Order to advance American interests in international financial regulatory negotiations and meetings."
Lastly, Mr. Giancarlo suggested that the CFTC should obtain a "right-size regulatory footprint" by:
- "normaliz[ing] CFTC operations" after the "era of Dodd-Frank implementation" by decreasing regulatory burdens and attending to "longer range goals," such as leveraging diversity;
- "eschew[ing] empire building" at the CFTC by "resetting its focus on its core mission" and streamlining the work of various divisions; and
- "run[ning] a tighter ship" in the wake of recent reductions in the agency budget and appropriations.
Acting Chair Giancarlo concluded:
"The time has come to reduce regulatory barriers to economic growth. The American people have elected President Trump to turn the tide of over-regulation. Financial market regulators, like the CFTC, must pursue their missions to foster open, transparent, competitive and financially sound markets in ways that best foster American prosperity."
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