CFTC Commissioner Rostin Behnam advocated for a principles-based approach to the implementation of Dodd-Frank initiatives and encouraged the Financial Stability Oversight Council ("FSOC") to take several steps to address FinTech-related regulatory issues.
In remarks at the Futures Industry Annual Conference in Boca Raton, Florida, Mr. Behnam voiced his opposition to the "wholesale rollbacks of Dodd-Frank," instead calling for a principles-based approach focused on tailoring regulations to the risk profiles of particular entities. To accomplish this, he said, would require clear regulatory guidance, adequate means to measure and ensure compliance, and a commitment to enforcement efforts. Mr. Behnam warned against undermining the core principles of Dodd-Frank regulation, but supported efforts to address the unintended consequences. Mr. Behnam also urged the CFTC to adhere to its established processes, rules and statutes rather than relying on ad hoc determinations to make important regulatory decisions. He further encouraged a careful consideration of the costs and benefits of any regulatory changes.
Mr. Behnam also encouraged the CFTC to adopt strategies focused on operational risk. He identified FinTech as an important area of regulatory focus, and emphasized the need for timely action to address consistently evolving risks associated with cryptocurrency and distributed ledger technology. He praised Treasury Secretary Steven Mnuchin's commitment to establishing an FSOC interagency group focused on cryptocurrencies. To address the risks and opportunities presented by FinTech development, Mr. Behnam called on the FSOC to take several specific steps:
- convene member bodies;
- foster discussions on oversight, responsibility, jurisdiction, and the general policy approach of each regulatory body;
- engage with relevant entities, including foreign regulators; and
- deliver a roadmap of policy findings and legislative proposals to Congress.
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