FIA Interviews CFTC Chair Massad Regarding CFTC's Agenda
The Futures Industry Association ("FIA") interviewed CFTC Chair Massad regarding his agenda as Chair of the CFTC. Chair Massad explained that, as the chair of an agency that is at the "forefront of regulating some of the most interesting developments in financial markets," he feels that his position at the CFTC affords him the opportunity to address the causes of the financial crisis.
Chair Massad mentioned that, while he was an attorney working in private practice, he helped to draft the ISDA agreements in 1986-1987, which contributed to his appreciation of the importance of cross-border issues. As with the ISDA agreements, he explained, a first step in resolving cross-border issues is to harmonize the laws of different jurisdictions. He stated that he "generally agrees" each country should have "appropriate deference" with respect to the laws of other jurisdictions.
According to Chair Massad, the CFTC's European counterparts do not have an issue with the CFTC's governance of clearinghouses; rather, the primary issue is how global regulators deal with dually registered clearinghouses. Chair Massad recommended that regulators build on the "cooperative oversight arrangement" rather than dismantle it. Ideally, he said, global regulators should create regulation that is "relatively consistent."
When questioned about lack of volume on swap execution facilities, Chair Massad explained that it takes more than a few months to implement the CFTC's "dramatic" changes. He explained that transparency in the swaps market was a high priority, noting that it is the responsibility of both the CFTC and swap data repositories to collaborate on the reporting of data. He mentioned, however, that there is no final "timetable" regarding this issue.
Commenting on the CFTC's "less than ideal" budget, Chair Massad explained that the market must self-regulate first. Additionally, he said that efficiency in utilizing resources is key, and mentioned that he is open to working with fellow regulators and agencies in order to maintain the CFTC's regulatory priorities.