Public Statements & Remarks

Statement of Commissioner Dawn D. Stump Before Global Markets Advisory Committee Meeting

December 17, 2020

Good morning and welcome to the final Global Markets Advisory Committee (GMAC or Committee) meeting of 2020.

I would like to begin by thanking Chairman Tarbert and my fellow Commissioners for attending today’s meeting.  Your contributions to the discussion are much appreciated.  I also want to recognize that due to the global nature of this Committee, there are many participating in less than ideal local time zones, and I am very grateful for their willingness to do so.  I would especially like to thank all of today’s esteemed presenters for being here and for taking the time out of your busy schedules to contribute to today’s important discussion.  Additionally, I would like to thank Chair Angie Karna for her leadership of the GMAC and Andrée Goldsmith, the GMAC Designated Federal Officer, for organizing today’s meeting.

As the year comes to a close, I also want to take the opportunity to recognize the specific contributions of this Committee to the Commodity Futures Trading Commission’s (CFTC or Commission) work.  Your last meeting focused on the need to better align our global regulatory expectations for margin requirements on transactions not subject to central clearing.  Since then, the Commission has acted on a number of related recommendations we received from this Committee and continues to consider other elements of the report you submitted from your Subcommittee on Margin Requirements for Non-Cleared Swaps.  This is but one indication of how important your work here is to informing the Commission, and for that, we are grateful.  To all of those who serve on each of the CFTC’s advisory committees and subcommittees – thank you.

Having devoted the last GMAC meeting to properly calibrating the regulation of non-centrally cleared derivatives, today we will shift our focus to advancing clearing in the global derivatives market.  The first panel will focus on regulatory developments affecting the global clearing system.  First, August Imholtz and Abigail Knauff from the CFTC’s Division of Clearing and Risk will present on the CFTC’s rulemaking concerning registration with alternative compliance for non-U.S. derivatives clearing organizations.  Second, Patrick Pearson, Head of Financial Markets Infrastructure at the European Commission, will discuss the finalization of EMIR 2.2, and, in particular, the regulation’s framework for the supervision of third-country central counterparties (CCPs).  Lastly, Nagaoka Takashi, Deputy Commissioner for International Affairs at the Japan Financial Services Agency, will discuss Japan’s interest in the CFTC providing an exemption for CCPs in Japan to be able to offer clearing services to U.S. clients.  These three presentations will, together, highlight the importance of mutual recognition of comparable, comprehensive regulatory frameworks for supervising CCPs around the world.  We will reflect on the progress we have made and what more can be done to advance the shared goal of increasing central clearing for derivatives.

During the second panel, four presenters will look back at global derivatives clearing during 2020, with a particular focus on the impact of the COVID-19 pandemic.  First, Nick Rustad, Chairman of the Board of Directors of FIA, will present a clearing member’s perspective on CCP margin requirements during the market volatility caused by the pandemic.  We will then hear from two CCP representatives: Sean Downey, Executive Director, Clearing, Risk & Capital Policy at CME Group and Dmitri Senko, Chief Risk Officer at Eurex Clearing, will present on their respective CCPs’ experiences during the pandemic.  Lastly, Sayee Srinivasan, Deputy Director in the Division of Clearing and Risk at the CFTC, will present a regulator’s perspective on CCP margin practices during the market volatility.  I am hopeful that these presentations will contribute to the ongoing dialogue regarding lessons learned from the market volatility earlier this year so that the global clearing system can remain resilient in the face of future market stresses.

I am very much looking forward to all of this morning’s presentations today, and I again want to thank our panelists for being here today and furthering these important conversations around global clearing.

Several months ago, when we were discussing potential dates to hold this meeting, I had hoped that by scheduling today’s meeting toward the end of the year, we might be in a position to convene in person.  While that is unfortunately not the case, I am thankful that we can continue to advance the GMAC’s priorities in a format that ensures everyone’s health and safety.  Our ability to adapt so quickly to a new normal has continued to amaze me, and I am so grateful to the GMAC members for continuing to engage with the Committee this year despite the challenging circumstances.  I am hopeful that I will see you again in-person in 2021.  As this is the last meeting of the year - not only for our five advisory committees, but also for our Commission – I wish to commend all of my regulatory colleagues around the world, as well as the market participants and infrastructure providers who have contributed to preserving sound and efficient markets during this challenging year.  I wish everyone safe, healthy, and happy holidays and a wonderful new year.