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CFTC Acting Chairman Wetjen Testifies on FY 2015 President's Budget Request for CFTC (with Lofchie Comment and Delta Strategy Group Summary)

CFTC Acting Chairman Mark P. Wetjen testified before the U.S. House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies regarding the FY 2015 budget request for the CFTC.Chairman Wetjen stated that, while his testimony may overstate the case for additional resources to the CFTC, he wants to make clear "the potential risks posed by the continued state of funding for the agency."

According to Chairman Wetjen, the responsibilities of the CFTC have grown significantly in recent years, and increases in the agency's funding have not kept pace with the growth of its responsibilities. Wetjen stated that the President's FY 2015 budget request reflects the priorities that the CFTC outlined in its FY 2014 Spend Plan, including an increased emphasis on examinations and technology-related staff, and is a significant step toward the longer-term funding level necessary for the CFTC to fulfill its mission.

Chairman Wetjen went on to review three of the primary mission priorities for FY 2015: examinations, technology and market integrity, and enforcement. According to him, of the $280 million and approximately 920 staff years ("FTEs") appropriated to the CFTC, $38 million and 158 FTEs would be provided for examinations. Chairman Wetjen stated that, if Congress fully funds this request, the CFTC can move toward annual reviews of all significant clearinghouses and trading platforms and perform more effective monitoring of market participants and intermediaries.

Additionally, Chairman Wetjen stated that the request supports a $50 million investment in technology and 103 data-analytics and surveillance-related positions in the Division of Market Oversight alone. However, according to him, this request must be paired with investments in personnel that can employ technology investments effectively.

Chairman Wetjen also noted that the request would provide $62 million and 200 FTEs for enforcement. According to him, this request brings the number of CFTC enforcement staff from 149 to 200. He stated that a full increase of enforcement staff means that the CFTC can pursue more investigations and better protect the markets.

Chairman Wetjen also noted that the request would appropriate more money to international policy at the CFTC, as well as to the economic analysis and legal analysis teams.

Lofchie Comment: One interesting aspect of the Chairman's remarks is his reference to the need for more staffing for "international coordination" and "legal analysis". Arguably, the need for more staffing for these activities reflects either a regulatory system that is too complex (thus creating the necessity for a high level of international coordination) or rules that do not really work (thus creating the need for numerous no-action letters). With regard to these potential failings, SEC Commissioner Piwowar's comments on the CFTC rulemaking process, as described in today's newsletter, seem on point.

Click here for the summary of the hearing prepared by Delta Strategy Group.

See: Chairman Wetjen's Testimony.
See also: Video of Wetjen Testimony.
Related news: CFTC Commissioner O'Malia Issues Statement of Dissent on FY 2015 Budget Request (with Lofchie Comment) (March 5, 2014); CFTC Commissioner Chilton Criticizes the President's FY 2015 Budget Funding the CFTC (with Lofchie Comment) (March 4, 2014).