CFTC Officials Criticize Budget Allocation

CFTC Chair J. Christopher Giancarlo and Commissioner Rostin Behnam criticized the CFTC budget allocation made in the recently passed Congressional spending bill. The budget was signed by President Trump.

The CFTC requested a budget of $281.5 million for fiscal year 2018. After CFTC funding has remained flat at $250 million for four years, the new spending bill allocates $249 million for fiscal year 2018. For fiscal year 2019, the CFTC requested $281.5 million (with $31.5 million to come from derivatives user fees).

According to a Bloomberg report, CFTC spokeswoman Erica Elliott Richardson said that Chair Giancarlo takes the decrease “incredibly personally,” noting that the CFTC is “absolutely astounded” by the outcome. Mr. Behnam echoed Mr. Giancarlo’s message, arguing that the agency “cannot responsibly innovate and meet the needs of rapidly evolving markets and market participants absent additional funding.”

Lofchie Comment: While in the minority at the Commission, Mr. Giancarlo was constantly forward-thinking on developing legal issues such as cybersecurity, while being attentive to economic issues and consequences (such as global market fragmentation). As Chair, he has worked to improve existing rules (e.g. project KISS). He has managed this while avoiding no-win partisan arguments. If Members of Congress were looking for a model of a good regulator, Mr. Giancarlo would be high on the list.

Chair Giancarlo made a detailed and compelling case for necessary and modest increases in budget. His request should have been met.