CFTC Commissioner Giancarlo Discusses Recent Rulemakings and the "New" Commission
In the latest installment of the Energy Metro Desk series "Drums along the Potomac," editor-in-chief John Sodergreen reports on recent discussions with CFTC Commissioner Chris Giancarlo on matters being considered by the CFTC.
Mr. Sodergreen notes that several policy and rule changes are "coming down" the regulatory pipeline and will have a "direct impact" on the energy sector. His recent count of SEC and CFTC congressional initiatives, bills, proposed rules and comment periods yielded 129 different measures.
In his interview, Commissioner Giancarlo discussed this CFTC activity, from position limits to high-frequency trading ("HFT") in gas markets. Commissioner Giancarlo stated that the CFTC is "a new Commission" and praised the willingness of Chair Massad to listen to well-reasoned, market experience-based arguments. Commissioner Giancarlo described previous CFTC regimes as enacting "narrative-based regulation," or regulation without the support of data.
Commissioner Giancarlo said that from a legal perspective, the new position limit regime could possibly exclude an entire class of commodities, but added that any such determination would have to be made by analyzing accurate and contemporary data. He also said that "unenumerated hedge exemptions" could be reinstated if sufficient cooperation with the exchanges allowed.
Mr. Sodergreen asked whether the use of HFT in the natural gas market was a matter of concern for regulators. Commissioner Giancarlo responded that regulators need to be mindful about the ways in which markets evolve to determine the right balance of "machines and human judgment."
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The above link leads to an excerpt from the most recent issue of Energy Metro Desk, which is published biweekly by Scudder Publishing Group, an energy trade news publishing company based in the Washington, D.C. metropolitan area. Those who are interested in learning more about Energy Metro Desk may do so by visiting www.energymetro.com or sending an e-mail to [email protected]. Reprinted with permission of the publisher, Scudder Publishing Group, LLC. Copyright 2015.