CFTC Commissioner Sees "Opportunities for Strategic Reform"

CFTC Commissioner Summer K. Mersinger urged the agency to stop prioritizing "headline stats," like the volume of cases filed and the monetary sanctions imposed, and to focus on improvements to regulatory oversight. 

In remarks at ISDA's Annual Legal Forum, Ms. Mersinger said the CFTC "should concentrate on where improvements can be made in our regulatory oversight functions to prevent pervasive violations and should devote more resources to educating market participants and the general public on how to avoid becoming victims of fraudulent behavior." She said that "enforcement should be the last resort to achieving compliance, not the first," but that "oversight of the derivatives markets and market participants by the agency's Division of Clearing and Risk ('DCR'), Division of Market Oversight ('DMO'), and Market Participants Division ('MPD') can achieve compliance more effectively and efficiently than bringing a costly, time-consuming, resource-intensive, and backward-looking enforcement action."

Ms. Mersinger also warned against issuing settlement orders that "push the bounds of the agency's authority." She argued that "[s]uch orders should avoid theories that are novel, that are arguably beyond the limits of the CEA and its implementing regulations, or that are likely to raise additional questions or issues."  

In addition, Ms. Mersinger advocated for clearer regulations to reduce reliance on vague rules, and for more flexible self-reporting incentives that encourage companies to cooperate proactively. She said strategic reform could lead to a more effective and fairer regulatory environment.