CFTC Chair Highlights CFTC Commodity Market Initiatives

In remarks at the Commodity Markets Council 2023 State of the Industry Conference, CFTC Chair Rostin Behnam highlighted CFTC challenges in 2022 and upcoming initiatives.

Mr. Behnam said that commodity markets for the last year were materially impacted by (i) post-pandemic rise in commodity prices, (ii) Russia's invasion of Ukraine, (iii) interest rate hikes, (iv) climate-related events and (v) global supply chain issues caused by China's COVID-19 lockdown. He said that commodity markets experienced spikes in activity throughout the year, mostly involving physical commodities on energy products, which lead to record-high margin levels at clearinghouses across all relevant asset classes. Mr. Behnam warned that the increased margin use puts added pressure on central counterparties. He called clearinghouse systemic risk "one of our most important responsibilities," and highlighted the need for the CFTC to continue to act.

Mr. Behnam also highlighted his sponsorship of the CFTC Agricultural Advisory Committee. He said that the Committee intends to assess (i) the impacts of the SPAN-2 initial margin framework on agricultural derivatives, (ii) access to futures commission merchants by smaller market participants, (iii) the impact of supply chain volatility on agricultural prices and (iv) the relationship between carbon credit markets and agribusinesses. He said that the CFTC can play a larger role in the development of a voluntary carbon market and will work with other U.S. and international regulators to develop a regulatory framework.