Public Statements & Remarks

Opening Statement of Commissioner Caroline D. Pham before the Global Markets Advisory Committee’s March 6 Meeting

March 06, 2024

Good morning.  Thank you to everyone who has joined this meeting, both in person here in Washington, D.C., and virtually, and thank you to my fellow Commissioners.  I want to thank the CFTC’s Global Markets Advisory Committee (GMAC) leadership team—Amy Hong, Darcy Bradbury, Brad Tully, Michael Winnike, Allison Lurton, Tara Kruse, Caroline Butler, and Sandy Kaul—for your continued hard work and commitment to tackling some of the biggest challenges facing global markets, particularly in light of macroeconomic factors, geopolitical dynamics, and the changing world around us.  I especially want to recognize the members of the GMAC’s Subcommittees and the workstream leads who contributed substantial time and resources to developing the recommendations that we will hear today.

I also want to thank my team—Harry Jung, the GMAC Designated Federal Officer, and Nicholas Elliot, the GMAC Alternate Designated Federal Officer, as well as Meghan Tente and Taylor Foy for their tireless efforts and dedication to excellence.  And, as always, many thanks to all the CFTC staff who are hosting and supporting the GMAC’s meeting today. 

Looking back, it was just over a year ago that we kicked off the newly-reconstituted GMAC[1].  At that time, I noted that it was the 50th anniversary of the Federal Advisory Committee Act, which is the genesis of the GMAC and the hundreds of other advisory committees sponsored by government agencies.

This year, we will mark the 50th anniversary of the enactment of the Commodity Futures Trading Commission Act of 1974, the legislation that created the current iteration of this agency[2].  I look forward to celebrating the CFTC’s proud history and stewardship of our markets.  I particularly want to commend the CFTC staff over the years who have worked hard to uphold the CFTC’s mission in safeguarding market integrity.  At last year’s Chairman’s Awards ceremony, we recognized employees with 45 years of service, and it was my privilege to present the awards in our New York regional office as the first Commissioner to ever hire staff from a regional office instead of DC headquarters.  It is amazing to think about the continuity and institutional knowledge that we have here at the agency.  I think that historical perspective reminds us of our roots in agriculture over a hundred years ago, and helps us stay true to the trust placed in us by the American people.  The CFTC is a special place steeped in culture and tradition, and that’s why I am honored to serve at the agency for the fourth time in my career.

The GMAC’s Progress

As you all know, in the real world you are evaluated on results.  I’d like to take a moment to highlight what the GMAC set out to do, what we’ve accomplished, and what’s to come.  I think it’s clear to see that the GMAC has delivered results and proposed pragmatic solutions to real-world problems.

Last year, we relaunched the GMAC with a public request for feedback on the GMAC’s agenda[3] and performed a global stock-take of the most significant issues in markets, as each of you sat in this room and presented[4].  It was incredible to have representation from such a broad swath of market participants, market infrastructures, service providers, commercial end users, and regulators flying in to join us in Washington, DC from over a dozen cities all over the world.

From there, the GMAC published a proposed two-year work program to identify and examine key issues and assess and inform international standards through engagement with international policymakers and authorities in other jurisdictions[5].  The proposed work program included global market structure issues, such as U.S. Treasury market reform; asset-liability management and funding markets; market volatility controls; improving liquidity across asset classes with respect to capital, clearing, and collateral requirements; and international alignment of trading and clearing obligations to address market fragmentation.

Proposed technical issues included international standardization and amalgamation of trade reporting for market oversight; global coordination of market events such as closures, drills, or recovery from disruption; efficiencies in post-trade processes; and other infrastructure issues that impact cross-border activity and access to markets.

And, proposed digital asset markets issues included industry standards and best practices for tokenized asset markets including (i) digital assets taxonomy, (ii) pre-trade, execution, and post-trade requirements, and (iii) governance, risk, and control frameworks; the regulation of non-fungible tokens (NFTs) and utility tokens; and other issues in digital finance and tokenization of assets, non-financial activities and Web3, and blockchain technology.

The GMAC and its Subcommittees wasted no time getting to work.  Last fall, the GMAC met to advance eight recommendations to the Commission[6] – the most of any CFTC advisory committee at a single meeting.  Those recommendations have already had real impact.  The Technical Issues Subcommittee’s work on swap data reporting was part of the Commission’s consideration when it approved proposed amendments to swap data requirements in December[7], and the Subcommittee submitted its recommendations to the public comment file for the proposed rules.

Today’s GMAC Meeting

We are again covering significant territory today with presentations and recommendations from each of our Subcommittees.

I want to thank Financial Stability Board (FSB) Secretary General John Schindler for providing today’s keynote on the FSB’s work program and priorities in 2024.  Secretary General Schindler joined the FSB in February 2023, after more than 20 years at the Federal Reserve Board (FRB), most recently as a Senior Associate Director in the FRB’s Division of Financial Stability.  It is an honor to have you here with us today.  As part of its mandate, the GMAC and its work program are very much aligned with the work programs of the FSB, International Organization of Securities Commissions (IOSCO), and other international standard setters, so your international perspective is very much appreciated here today. 

We’ll then hear from Michael Winnike on the Global Market Structure Subcommittee’s recommendation regarding the use of U.S. Treasury exchange-traded funds (ETFs) as eligible initial margin for uncleared swaps.  Michael is a Director and Head of U.S. Market Structure at BlackRock.  It is timely for the eligibility of U.S. Treasury ETFs to be considered within the uncleared margin collateral framework given their potential benefits in enhancing market resiliency, liquidity, and efficiency, among other things.

Wendy Yun will provide an update on the Subcommittee’s Swap Block and Cap Size Recommendation[8].  Wendy is a Managing Director at Goldman Sachs Asset Management.  She’s also our SIFMA AMG representative.  The Subcommittee has spent considerable time thinking about ways to engage with the Commission in this area to enhance market liquidity and promote financial stability, and I look forward to hearing the update on what next steps could hold.

From the Technical Issues Subcommittee, we’ll hear from Charles DeSimone on the recommendation to publish a T+1 securities settlement transition resource document crafted by the Subcommittee.  Charles is a Managing Director at SIFMA.  I am looking forward to what I am sure will be an incredible resource for the industry during such a significant transition that has global implications.  It truly reflects the dedication of the Subcommittee in helping inform and prepare market participants for regulatory implementation.

I’m looking forward to our panel discussion on Basel III Endgame: Perspectives from Derivatives Market Participants.  Our panelists include:

  • Reggie Griffith, Global Chief Compliance Officer at Louis Dreyfus Company;
  • Dan Gallagher, Director of Commodity Sales and Trading at Basin Electric Power Cooperative, speaking on behalf of the National Association of Rural Electric Cooperatives;
  • Elisabeth Kirby, Head of Market Structure at Tradeweb; and
  • Joseph Hwang, Managing Director at Goldman Sachs. He is representing FIA and ISDA.

I greatly appreciate the diverse perspectives on the panel, especially from commercial end users, given that the derivatives markets originally came to exist in order to facilitate risk management and price discovery for U.S. producers, growers, merchants, and other key pillars of the real economy.  If the CFTC needs to act in this area—in particular for impacted end users—this panel’s insights could help inform and facilitate any CFTC engagement.  I appreciate the recent discussion hosted by the CFTC’s Environmental and Energy Markets Advisory Committee (EEMAC), sponsored by Commissioner Summer Mersinger, to explore the impact of the Basel III endgame proposal on energy markets, and I’m glad we can continue that discussion.

Finally, we’ll hear from the Digital Asset Markets Subcommittee on its highly anticipated digital asset taxonomy proposal.  Presenting this recommendation are:

  • Caroline Butler, Global Head of Digital Assets at BNY Mellon;
  • Sandy Kaul, Senior Vice President and Head of Digital and Industry Advisory Services at Franklin Templeton;
  • Adam Farkas, Chief Executive Officer of GFMA and Chief Executive Officer of AFME;
  • Diana Barrero Zalles, Head of Research and Sustainability at Global Blockchain Business Council; and
  • Ninad Nirgudka, Consultant at Boston Consulting Group

The Subcommittee’s work coincides with and will help inform the modernization of clearing, settlement, and post-trade processes, and is an important first step in creating a common framework that will grow and adapt over time.

Looking Ahead

I think the takeaway from this meeting today is that the GMAC’s work is having a real impact on the policy approach to developing pragmatic solutions to address the most significant issues in global markets.  I have shared the GMAC’s recommendations to promote the resiliency and efficiency of global markets with international standard setters and regulatory counterparts around the world, and there has been great interest in the GMAC’s work since it is aligned with key international priorities of the FSB and IOSCO.  I hope that the GMAC recommendations can be considered as part of key international working groups and task forces, as you heard earlier today.   I have also discussed with Chairman Behnam whether some of these recommendations could become new rules here at the CFTC, and I appreciate his leadership in overseeing our markets.  I look forward to working with the Chairman and my fellow Commissioners on proposing rules where appropriate. 

Next month will mark my two-year anniversary as a Commissioner, and I re-watched our confirmation hearing[9] and re-read my testimony[10] to reflect on our journey so far. I wanted to be a Commissioner to make a difference and to make our markets better.  Through all of your efforts, the GMAC is delivering on what we set out to do, and I want to thank you for helping me to make a difference through my leadership as a Commissioner.

[2] Commodity Futures Trading Commission Act of 1974: STATUTE-88-Pg1389.pdf (