CFTC Chair Rostin Behnam described the challenges associated with developing rules to govern trading on electronic platforms, given technological innovations that have created a "growing divergence" between CFTC rules and the marketplace.
In an address before the ABA Business Law Section Derivatives & Futures Law Committee, Mr. Behnam emphasized the importance of having a "strategic, mission-driven agenda supported by a sound - but flexible - infrastructure." Mr. Behnam also emphasized the CFTC's goal of encouraging innovation while "enhancing the regulatory experience for market participants." He highlighted the agency's approach, which includes:
- increasing stakeholder engagement;
- leveraging principles-based regulation; and
- harmonizing regulations for market participants subject to CFTC and SEC jurisdiction.
Further, Mr. Behnam discussed the need for the CFTC to improve data collection and use as part of its larger strategy to strengthen the derivatives markets while "address[ing] new and emerging risks." Mr. Behnam highlighted, among these risks, those associated with climate change and the need to keep pace with "emerging markets in the Middle East and Asia."
On enforcement, Mr. Behnam suggested that the CFTC might use its authority more aggressively with respect to cash market issues. He described the CFTC as having historically "refrained" from bringing enforcement actions with respect to misconduct in the cash market. He rejected this approach, and described the use of "enforcement authority to crystalize our law through judicial interpretation more as a feature of the system than as a bug."
Mr. Behnam highlighted the importance of moving towards a more diverse workforce within the agency, and talked about his directive "to better attract, develop, retain, and promote" one that "will serve as a hallmark in the derivatives industry." In this regard, he touted his hiring of the CFTC's first Chief Diversity Officer.
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