Public Statements & Remarks

Statement of Chairman Heath P. Tarbert Before the December 10, 2019 Open Meeting

Tripling Down On Transparency

 December 10, 2019



As regulators, we must be mindful not only of what we do, but how we do it.  Our shared vision for the CFTC is to be the global standard for sound derivatives regulation.[1]  Soundness is built on transparency: we serve our markets best when we act with the benefit of public input and dialogue.  We also owe it to those who rely on our derivatives markets to regulate in the open.  With this in mind, our agency recently adopted Clarity—which we describe as “[p]roviding transparency to market participants about our rules and processes”—as one of the four core values of the CFTC.[2] 

Importance of Transparency

Given the importance of transparency, I am committed to holding Commission deliberations in public view.  I have long considered the CFTC to be the most important regulator most Americans have never heard of.[3]  We are working to change this: during the last few months of 2019, our current Commission will have held six open meetings—the same number the Commission held during 2015, 2016, 2017, and 2018 combined.[4]  In 2020, I intend to continue to hold open meetings on a monthly or bimonthly basis so we can continue to decide important policy matters before the public. 

While transparency is important for all regulators, it is especially critical for us.  When the Dodd-Frank Act[5] gave the CFTC jurisdiction over the swaps market, we were entrusted with overseeing more than $400 trillion in notion value.[6]  That is a humbling level of responsibility.  It demands that we give the public ample opportunity to see what the Commission is doing and to engage with us.  We will not regulate from behind a curtain.

Reaffirming the value of transparency is vital because the need to “get things done” has not always lent itself to getting them done the right way.  Commentators have argued that in implementing the Dodd-Frank Act, the CFTC sometimes stumbled in its commitment to transparency by focusing too much on the deliverables and not enough on the delivery.[7]  In particular, the CFTC was criticized for regulating through staff no-action letters, policy statements, and enforcement actions rather than “a transparent, notice-and-comment rulemaking process.”[8]  Given the immense demands placed on this agency in the immediate wake of the Dodd-Frank Act, our predecessors surely did not make opacity the goal.  Nevertheless, opacity was the result: the agency too often traded openness for what some have dubbed the quiet expediency of ‘“backroom rulemaking.’”[9]

As we approach the year 2020 and beyond, I am pleased to announce that the CFTC will triple down on transparency by taking action in the following three areas: (1) how we make regulations; (2) how we apply them; and (3) how we enforce them.

1.  Transparency in Rulemaking

First, we will reaffirm the importance of notice-and-comment rulemaking established under the Administrative Procedure Act (APA) as the foundation for providing transparency in how we make regulations.  Today the Commission is voting to approve a final rule to amend Part 13 of our regulations to clarify how we receive, process, and respond to petitions for rulemakings filed under the APA.  Apart from being fully consistent the APA, our Part 13 also retains Section 13.2, which permits any person to petition the Commission for a rulemaking.  This is a unique feature of the CFTC’s rulemaking framework that reinforces transparency and the right of the public to participate in our regulatory process.  Most importantly, we will publish petitions for rulemakings on the CFTC website, facilitating public engagement in our rulemaking process.   

In addition to updating Part 13, we will be publishing a summary of our rulemaking process on the CFTC website.[10]  The summary is written for the general public and is designed to explain in plain English how the CFTC proposes and finalizes regulations.  I believe the summary is an important step in improving the public’s understanding of our regulatory process.

2.  Transparency in No-Action, Interpretive, and Exemptive Relief

Second, I am committed to ensuring our agency is transparent in how we apply our regulations through the use of no-action, interpretive, and exemptive relief letters.  To be sure, the Commission is most transparent when we regulate through public notice-and-comment rulemakings that require a majority vote of presidentially-nominated, Senate-confirmed officials.  We should do so whenever possible.  Staff relief should be a supplement, rather than a substitute, for the APA rulemaking process.  I am therefore pleased to announce that the CFTC is finalizing guidance to ensure staff no-action, interpretive, and exemptive letters are limited only to those situations where they are truly appropriate.[11]  Examples include those situations with unique circumstances not suitable for a general rulemaking or where only temporary relief is contemplated pending either the rulemaking process[12]or one or more market events (e.g., Brexit, SOFR transition, etc.).

We must also increase transparency even where staff relief is appropriate.  Today I am also announcing that as of January 1, 2020, the CFTC will publish all requests for staff no-action, interpretive, and exemptive relief on our website when such relief is granted.[13]  Publishing requests alongside our relief letters will harmonize our agency’s practices with those of other federal financial regulators.  This practice will likewise provide greater public visibility into issues before our Commission.  Publicly disclosing requests for staff relief further demonstrates our commitment to putting transparency into practice.

3. Transparency in Enforcement Settlements

Finally, we must be transparent in how we enforce the law.  One goal of our enforcement program is to change behavior in a positive way by deterring misconduct before it happens.  Deterrence requires clarity about how our laws work.  Long gone are the days when kings would post their edicts high on columns to make the law harder to read and easier to transgress.[14]  Our Founders instead adopted a system in which “the law is king.”[15]  Indeed, it has been said that in our American system, the rule of law is a law of rules.[16]  

Consistent with this mandate, our Division of Enforcement will soon publish an updated Enforcement Manual that will inform the public about a number of changes designed to increase transparency.  We take seriously the need to inform the public about our enforcement priorities and practices. 

In the same vein, the Commission and its staff must be free to speak publicly about enforcement matters.  Beginning January 1, 2020, I will not present to the Commission any enforcement settlement or consent order that restricts the Commission or our staff from publicly stating their views on the case.[17]  Affirming this right to speak ensures the CFTC can inform the public of our enforcement priorities.  It also advances customer protection: the facts of past cases can serve as early warning signs of new types of fraudulent or manipulative activity. 

At the same time, genuine transparency cannot be one-sided.  Just as the Commission should be able to speak freely about enforcement actions, so too should defendants.  Also beginning on January 1, 2020, I will not put before the Commission any settlement agreement or consent order that unduly restricts a defendant’s ability to speak publicly about an enforcement matter.[18]  While the Commission will continue to require that defendants who agree to settle a matter not deny liability, or any fact or statement to which the parties have agreed, the CFTC will not limit any defendant’s ability to discuss his or her case publicly or to criticize our agency.  This approach is good for transparency as well as accountability: defendants may speak freely, but will be unable to hide behind the language of settlements to avoid answering tough questions about their conduct.


Transparency is sometimes avoided because it opens the door to criticism.  But as Aristotle purportedly reminds us, “[c]riticism is something we can avoid easily by saying nothing, doing nothing, and being nothing.”[19]  That has never been of the path of the CFTC during our nearly 45 years of regulating our markets and enforcing our rules.  Nor will it ever be.  Just as we will not shrink from carrying out our duties, calling out wrongdoing, and enforcing the law, so too will we ensure market participants have true insight into the operation of our agency.

Criticism is not always pleasant, but it is a core facet of democracy.  The Commission is an agency of the U.S. Government, and it should be scrutinized when it acts.  When asked what type of government came out of the Constitutional Convention, Benjamin Franklin famously answered, “A Republic, if you can keep it.”  Our Commission will do its part.  



[1] See CFTC Vision Statement, available at

[2] See CFTC Core Values, available at (emphasis added).

[3] Remarks of CFTC Chairman Heath P. Tarbert to the 35th Annual FIA Expo 2019 (Oct. 30, 2019), available at

[4] See CFTC website, “Upcoming Events,” available at

[5] Pub. L. No. 111-203, 124 Stat. 1376 (2010).

[6] See CFTC, “Dodd-Frank Act,” available at

[7] Hester Peirce, Regulating through the Back Door at the Commodity Futures Trading Commission 61 (Geo. Mason Univ. Mercatus Inst. Working Paper Nov. 2014).

[8] Id. at 35; 4.

[9] Id. at 4 n.5..

[10] See CFTC website, “Commission Rulemaking Explained,” available at

[11] The CFTC expects to release the aforementioned guidance on staff relief in early 2020.

[12] In line with this commitment to regulating via public notice-and-comment rulemaking whenever possible, today the Commission will also vote on a proposal to codify no-action relief that has been in place since 2014.  The no-action relief makes certain anti-evasionary conditions of the inter-affiliate swap clearing exemption practicable for non-U.S. affiliates.  Codifying this relief in the Commission’s regulations is good policy and good government.  The Commission will vote on codifying other no-action letters in a number of areas—with appropriate revisions where needed—in 2020 and beyond.

[13] Requests for staff relief prior to January 1, 2020, will not be affected. 

[14] See Antonin Scalia, The Rule of Law as a Law of Rules, 56 U. Chi. L. Rev. 1175, 1179 (1989).

[15] Thomas Paine, “Common Sense,” in Common Sense and Related Writings 72, 98 (Thomas P. Slaughter ed., 2001).

[16] See Scalia, supra note 14, at 1175.

[17] The U.S. Court of Appeals for the Seventh Circuit has already affirmed the right of an individual CFTC Commissioner to state publicly the reason for his or her votes on any matter before the Commission.  CFTC v. Kraft Foods Grp., Inc., No. 19-2769 (7th Cir. Oct. 22, 2019) (quoting Sec. 2(a)(10)(C) of the Act).

[18] While this approach is largely consistent with the CFTC’s past practices, I believe that formalizing it will ensure consistency in the years to come.

[19] James C. Price, “A Lesson on Criticism from Aristotle,” Refresh Leadership Blog (Jan. 22, 2013), available at  One should note that while many websites appear to attribute this quote to the philosopher Aristotle, others contend the saying was coined first in the Nineteenth Century by, among others, the American writer Elbert Hubbard. Regardless of its author, the quote is almost certainly something in which Aristotle would concur fully.  See Aristotle, Nicomachean Ethics 49 (Hippocrates G. Apostle, Trans.) (1984) (“[T]o die in order to avoid poverty or the pain of rejected love or anything that is painful is a mark not of a brave man but rather of a coward; for it is softness to avoid painful effort.”).