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CFTC Budget Request Includes Derivatives User Fees

The CFTC requested a budget of $281.5 million for fiscal year 2019. This is the same amount requested in FY 2018 and a $31.5 million increase over the request in FY 2017. CFTC Chair J. Christopher Giancarlo reported that $31.5 million of the total budget request would be generated by the collection of fees (pending legislative authorization) on derivatives users. According to a Wall Street Journal report, the budget request represents a compromise between the CFTC and the White House, keeping the CFTC's Congressional appropriations at $250 million and allowing for additional funding via fees.

Mr. Giancarlo said that the budget request reflects the transforming nature of derivatives markets, particularly exemplified by the expanding role of digital technology and the "electronification" of the markets. He asserted that the funds would enable the CFTC to enhance its economic modeling and econometric capabilities with the goal of "boosting . . . analytical expertise" and improving the ability to monitor systemic risk, especially in clearinghouses. Mr. Giancarlo further added that he expects the number of designated clearing organizations to continue to increase, accompanied by an increase in the complexity of oversight and the regulation of these entities.

Mr. Giancarlo also highlighted the expanding role and attendant challenges of FinTech. He explained that such innovation alters the regulatory landscape and presents both new opportunities and new challenges. As an example, he pointed to the self-certification of virtual currency futures products in FY 2018.

The 2019 budget request includes a breakdown of funding by the CFTC Division and an outline of programs and initiatives. The CFTC is requesting the most funding for the Office of Data and Technology ($86.6 million) and the Division of Enforcement ($54.8 million).

In a statement accompanying the budget request, Commissioner Brian Quintenz stated "We live in a world of scarce resources. Every organization wishes it had more financial and human capital. Regardless of Congress' ultimate appropriation to the agency, the CFTC remains dedicated to streamlining its operations and prioritizing its market regulation to best utilize the funding that it receives."

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