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CFTC Chair J. Christopher Giancarlo reviewed key items of the agency's agenda, including swaps market reform, cooperation with international regulators and upcoming regulatory proposals.
In remarks at the 44th Annual International Futures Industry Conference, Mr. Giancarlo criticized regulatory implementation of G-20 swaps market reforms. In particular, Mr. Giancarlo (i) repeated his concern about the excessive amount of capital that bank regulators require financial institutions to take out of trading markets (specifically addressing the supplemental leverage ratio), (ii) reiterated his view that the current swap execution facility framework is problematic ("too prescriptive, too burdensome and too modeled on futures markets") and (iii) indicated his disappointment at the "unfinished" harmonization of international data standards.
Mr. Giancarlo emphasized the agency's mission to enforce market regulation and pursue bad actors. He also stressed that the CFTC must continue to work with its foreign regulatory counterparts, citing the need to coordinate issues on Brexit and changes to European Market Infrastructure Regulation.
Going forward, Mr. Giancarlo said the CFTC will (i) consider permanent relief for insured depository institutions from having to count certain swaps toward the dealer de minimis threshold, (ii) issue a new proposal on position limits and (iii) issue proposals on cross-border matters, including the registration of non-U.S. central counterparties clearing swaps for U.S. persons, and the registration and regulation of swap dealers.
Commentary / Nihal Patel
Mr. Giancarlo's speech is, essentially, a public departure memorandum. While not groundbreaking, it highlights one of Mr. Giancarlo's best practices as Chair: an ongoing and thoughtful public dialogue on his priorities. He has consistently made public his views on the issues faced by the CFTC and has taken the time to explain these views both in speeches and in writing.
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