June 14, 2011
Thank you all for joining us today for another meeting regarding the Dodd-Frank Act.
To-date, the Commission has issued over 50 advance notices and notices of proposed rulemaking, two interim final rules, one final rule and one proposed interpretive rule. This has been the most transparent rulemaking process that I have been involved with in over 20 years of rule writing. The shear amount of information that staff has reviewed, the meetings they have had, and the questions they have answered regarding Dodd Frank could only be described as monumental. Yet staff has completed all this work while simultaneously continuing their pre-Dodd Frank duties. The quality of the rules we have seen so far and the fact that the markets we regulate have continued to operate efficiently and effectively is a testament to the quality of staff we have at the CFTC and I thank them for all the work they have done and are continuing to do.
Many have said that our agency is moving too fast to implement Dodd Frank. They claim we have not given them enough time to comment and that we have not given ourselves enough time to fully appreciate the effects the rules we are writing will have on the markets soon to be under our jurisdiction. An equal number of individuals are claiming that we are moving much too slow with the rulemaking process. They claim that anything less than strict adherence to the Congressionally imposed deadlines of Dodd Frank is a failure. Given our level of staffing, I believe that we are moving at a pace that ensures that rules we are writing follow the intent of Congress, are responsive to the comments of the American public, and based on sound and fundamental market principles. If we were to move slower, I fear that unnecessary delays may leave the country vulnerable to another financial crisis. If we were to move faster, I doubt the quality of the written rules would continue to remain at the high level I have become accustomed to receiving from the staff.
Regarding today’s meeting, once again I think it is a testament to Chairman Gensler, and the transparent nature of the process he has overseen, that staff, together with market participants and users, were able to identify issues with the July 16th date and develop an effective way to ensure that until our rules are completed, market users will continue to have the ability to effectively use derivatives as risk mitigation instruments.
The proposed exemptive relief has a sunset provision of December 31, 2011 that I strongly support. While others may argue that the market requires certainty and there is no way we will meet this date, I believe these fears are unfounded. The sunset provision sets an ambitious but achievable goal for completion of the Dodd Frank rulemakings, and I believe that the Commission and its staff should be held accountable for providing needed certainty to the markets and the public by that date. Should we not finish by December 31, it is nonetheless appropriate and prudent to periodically review the extent and scope of relief provided from the CEA and to tailor that relief to the Dodd Frank implementation schedule. We will know more about the full mosaic of the rules by December than we know now, and that knowledge will help us fashion additional exemptive relief if need be. A more personal reason is that it is likely I will no longer be a Commissioner by that date. I believe that my successor should have a voice in establishing the policy governing the CFTC at that time. Regardless, today’s proposed order will not affect the Commission’s ability to provide further relief to prevent undue disruption or costs to market participants.
I would like to once again thank the staff at the CFTC for all their hard work on these very important proposed rules, and I look forward to their presentations.
Last Updated: June 22, 2011