July 7, 2011
Thank you all for joining us today for our first meeting to consider final rules promulgated pursuant to the Dodd-Frank Act.
I have spent much of the last thirty years either writing regulations or trying to adhere to them, and I am amazed at the work this Commission has been able to accomplish in less than a year since the Dodd-Frank Act became law. I am also acutely aware of the work that lies before us as we move to finalize all of our proposed rules and then implement them. As I have stated before, this has been the most transparent rulemaking process that I have ever been engaged in, and I credit Chairman Gensler for seeking public comment at almost every opportunity and in a variety of venues to ensure that commentators have had ample opportunity to provide feedback on the proposed rules.
While the public side of the rulemaking process has been extremely transparent, I have been fairly quiet regarding my thoughts and deliberations during the proposed rule phase of this undertaking. I have acted this way consciously, mindful of the important role that the public should play in this process. I was purposely liberal with voting on proposed rules, because I felt it was more important to get public comment than to nit-pick the rules at their formative stages.
As we begin to finalize the Dodd-Frank rules, and after having reviewed the volumes of comments we have received from the public and read the transcripts from our public roundtables, the tone and tenor of the questions I have for the rulemaking teams will be different. Before even considering any final rule, I have asked each rule writing team to answer a set of questions that basically ask three things:
1. whether or not the proposed final rule adheres to the agency’s principle-based regulatory approach, and if not, why not;
2. whether staff has the resources, both human and fiscal, to implement the proposed final rule as drafted; and
3. if there are insufficient resources, how will duties and staff prioritize the work they are currently doing with the work that the Dodd-Frank rules require.
I have asked these questions because I truly believe that the innovation and growth that we witnessed in the commodities industry during my tenure on the Commission was due, in no small part, to the nimbleness of the Commission as a principles based regulator. If we are going to stray from this role, I want to hear good reasons why. While my preference is for rules that adhere to our principles based model, due to the CFTC’s well-documented lack of proper funding, I may be forced to accept rules that are more prescriptive than I would generally favor. If we do not have the necessary resources to be principles based regulator, we must still enforce the law, even if we do so in a prescriptive and restrictive fashion that has consequences to the growth of our industry.
I also am interested in how staff will prioritize their work in the post-Dodd-Frank world. While it is important to meet all the new mandates of the Dodd-Frank Act, I think it is equally important that the commodities markets continue to function as effectively and efficiently as they always have.
Regarding the rules we will consider today, I would again like to thank Chairman Gensler for working collaboratively with my office to get the rules to the point where I feel comfortable supporting them. It is very hard for every rule to satisfy every commissioner when it is initially drafted. I had concerns and questions with today’s finals rules that I brought to the Chairman’s attention. To his credit, the Chairman, when I raised these concerns and questions, instructed staff to work with me to address my issues. This has truly been a collaborative process, and I thank Chairman Gensler for that.
I would like to thank the staff at the CFTC for all their hard work on these very important proposed final rules, and I look forward to their presentations.
Last Updated: July 7, 2011