Public Statements & Remarks

Dissenting Statement of Commissioner Caroline D. Pham on Large Trader Reporting Rule

April 30, 2024

I respectfully dissent from the Large Trader Reporting Rule primarily because it raises fair notice and due process issues for future regulatory changes. The Commission is also delegating its authority to a non-existent office, which I believe is not only impermissible, but makes no sense.

I would like to thank Owen Kopon, Paul Chaffin, Chase Lindsay, Jason Smith, Nora Flood, and Vince McGonagle in the Division of Market Oversight, as well as James Fay in the Division of Data and Daniel Prager in the Office of the Chief Economist, for their work on the Large Trader Reporting Rule. I appreciate the staff working with me to make revisions to address my concerns. While the revisions to the rulemaking preamble are intended to alleviate the fair notice concerns, they ultimately do not provide sufficient due process protections as required under the law because there were no associated revisions to the rule text.

Overall, I continue to support most of the rule amendments that would update the outdated large trader reporting submission standards in the Part 17 regulations.[1] The CFTC’s Commitment of Traders (COT) Report, derived from Part 17 data, provides transparency and aids in price discovery and risk management for market participants and end-users. I support improving the CFTC’s preparation of the COT Report. I also believe that the two-year implementation period will help to minimize disruptions and ensure a seamless transition with enough time for adequate testing of firms’ systems and processes for large trader reporting prior to the compliance date. I strongly encourage the Commission to include adequate implementation periods in all of our rulemakings, which will support compliance and risk management efforts that enhance market integrity.

However, I have two significant concerns. First, the Commission will make a new delegation of authority to the Director of the Office of Data and Technology (ODT) in Regulation 17.03(d) to determine the form, manner, coding structure, and electronic data transmission procedures for reporting the data elements in Part 17 appendix C and to determine whether to permit or require one or more particular data standards. I find it deeply troubling and against all common sense that the Commission is making a new delegation of authority to an office that no longer exists at the CFTC.[2]

I find it insincere, or incongruous at best, for the Commission to state that it is dedicated to providing certainty to market participants—or even clarity, which the Final Rule asserts seven times—when the Commission is delegating authority to a ghost office to make decisions that may cost firms millions of dollars to implement.

Second, multiple commenters requested that the Commission include a notice standard under Regulation 17.03(d) if the ODT Director changes these standards in the future.[3] Commenters raised concerns about potential costs associated with future changes, such as technology and infrastructure changes for reporting firms. Even seemingly minor changes to reporting requirements require firms to identify and allocate technology budget and resources; program and test reporting logic; and implement controls, among other things. Inexplicably, the Commission declined to adopt a reasonable notice standard in the regulation, even though fair notice is inherent to due process under the Administrative Procedure Act and other law.

Considering the CFTC’s aggressive enforcement posture towards pursuing reporting violations with a strict liability standard and no materiality threshold, resulting in seven-figure penalties for anything less than 100% perfection,[4] I am deeply concerned about using delegated authority to change reporting standards without reasonable notice requirements in the regulation. This would ensure that firms have adequate time for compliance and implementation of new requirements.

Accordingly, while I support most of the revisions to the Large Trader Reporting Final Rule, my outstanding concerns outweigh that support.

[1] Statement of Commissioner Caroline D. Pham in Support of Notice of Proposed Rulemaking for Large Trader Reporting Requirements Under Part 17 (June 7, 2023),

[3] See Futures Industry Association, Large Trader Reporting Requirements (RIN 3038-AF27), 7 (Aug. 28, 2023),; ICE Futures U.S., Large Trader Reporting Requirements (RIN 3038-AF27), 2 (Aug. 28, 2023),; Options Clearing Corporation, RIN 3038-AF27 Large Trader Reporting Requirements, 4 (Aug. 28, 2023),

[4] See, e.g., CFTC Orders Morgan Stanley and Co. Incorporated to Pay $350,000 Penalty for Omitting Futures and Options Data from Part 17 Large Trader Reports (Nov. 2, 2017),; see generally CFTC Releases FY 2023 Enforcement Results (Nov. 7, 2023),; CFTC Releases Annual Enforcement Results (Oct. 20, 2022),