CFTC Acting Chair Giancarlo to Move Past Dodd-Frank and Focus on How CFTC “Applies Reforms”

In the June 23, 2017 issue of The Risk Desk, editor John Sodergreen offered his take on CFTC Acting Chair J. Christopher Giancarlo’s efforts to work on regulatory reform.

Mr. Sodergreen noted a sharp distinction between the friendly reception Mr. Giancarlo received at recent congressional hearings with that of his predecessors, who, he said, “often managed to draw fire from Republicans and Democrats alike.” Mr. Sodergreen emphasized how little controversy was generated at Mr. Giancarlo’s budget hearing, stating:

“[U]p and down the line, Republican and Democrat alike seemed to praise the acting chairman for submitting a budget request that exceeds the president’s number by over $30 million. We sensed no pushback at all, which had to be some sort of first.”

Mr. Sodergreen was also taken by how Mr. Giancarlo was endorsed at his nomination hearing before the Senate Agriculture Committee. Mr. Sodergreen called it “a slam-dunk, a fan-fest almost,” and added: “[i]t was the fastest confirmation hearing we had ever seen and we covered them all since Jim Newsome’s hearing.”

Mr. Sodergreen highlighted Mr. Giancarlo’s non-confrontational approach to regulatory reform, as reflected in these congressional appearances. Concerning Dodd-Frank, Mr. Sodergreen (i) stated that Mr. Giancarlo “didn’t see the value in debating whether Dodd-Frank is good or bad” and (ii) explained that Mr. Giancarlo chose to focus on high-frequency trading and cyberattacks, which are two “massive” areas of concern for the CFTC. In this regard, Mr. Sodergreen pointed out that Mr. Giancarlo is calling for a forward-looking agenda. Mr. Sodergreen further highlighted Mr. Giancarlo’s explanation of the Project KISS (“Keep It Simple, Stupid”) initiative, which Giancarlo described as focused on how reforms are applied rather than repeal or rollback (see previous coverage).

Based on these hearings, Mr. Sodergreen predicted an easy confirmation. “[We]’d bet the farm Giancarlo sails through,” he said.

Lofchie Comment: On the one hand, there is a good amount of Dodd-Frank that should be repealed or rolled back, particularly in the commodities world. On the other hand, there is something to be said for avoiding partisan disputes.