Public Statements & Remarks

Statement of Chairman Rostin Behnam in Support of the Proposed Requirements for Designated Contract Markets and Swap Execution Facilities Regarding Governance and the Mitigation of Conflicts of Interest Impacting Market Regulation

February 20, 2024

I support the proposed rules for designated contract markets (DCMs) and swap execution facilities (SEFs) that would establish governance and fitness requirements with respect to market regulation functions and related conflict of interest standards.  Today’s action continues my commitment to ensure that conflicts of interest are appropriately mitigated, and that SEF and DCM governing bodies adequately incorporate an independent perspective.  Advancements in technology, coupled with demand for ever greater efficiency and speed, are pushing markets and market structure in new directions.  This new disruption raises new and novel policy issues in all aspects of markets, including conflicts of interest.  Today is just one step towards addressing potential and existing conflicts of interest in CFTC markets, to ensure markets remain strong, resilient, and transparent. 

The proposed rules would enhance substantive requirements for identifying, managing, and resolving conflicts of interest related to market regulation functions.  The rules also establish structural governance requirements regarding the makeup of SEF and DCM governing bodies.  Importantly, today’s proposed rules would simplify the CFTC’s rules for conflicts and governance fitness standards by harmonizing the regulatory regimes for SEFs and DCMs.  In addition, today’s proposed rules would harmonize and enhance rules for SEFs and DCMs regarding the notification of a transfer of equity interest in a SEF or DCM, and would confirm the CFTC’s authority to obtain information concerning continued regulatory compliance in the event of a change in ownership of a SEF or DCM.

I look forward to hearing the public's comments on the proposed amendments to the regulations for SEFs and DCMs. I thank staff in the Division of Market Oversight, Office of the General Counsel, and the Office of the Chief Economist for all of their work on the proposal.