For the first time in its 25-year history, the Commodity Futures Trading Commission will have a financial services professional at its helm. William J. Rainer, co-founder and former managing director of Greenwich Capital Markets, was sworn in as Chairman on August 11. While it is too early to tell exactly what that will mean to our industry, the prospects are extremely positive.
Our first glimpse of how he views his tenure came during a Senate confirmation hearing in early August when he listed his top priorities for the agency as reauthorization, an effective working relationship with the Senate and House committees and the President's Working Group on Financial Markets, and establishing the reputation of the CFTC for being a "responsive and decisive agency that is well-suited to the marketplace."
As the Senate and House contemplate reauthorization, he will be faced with determining how both exchange and off-exchange markets will be regulated going forward. Discussions to date have included such sweeping changes as rewriting the Commodity Exchange Act, de-regulating U.S. exchanges, and rethinking the Shad-Johnson Accord. All this is taking place in an increasingly electronic world where exchanges are no longer confined to national borders and customers can access exchanges just as easily as intermediaries.
We agree with Chairman Rainer that relationships with Congress and the President's Working Group should be a top priority. In the aftermath of last year's jurisdictional debate on regulation of over-the-counter markets, the CFTC Chairman needs to be seen as someone who is willing to work with Congress, the Treasury Department, the Fed and the Securities and Exchange Commission on common issues. It bodes well for a joint solution to the uncertainty surrounding equity swaps and a satisfactory resolution of the debate regarding the Treasury Amendment. It will also be important for Chairman Rainer to get ahead of the technology issues and develop a framework where the financial services business can grow without unnecessary regulatory red tape. The industry also will benefit enormously from the CFTC he describes in his last priority.
I am certain that not all of these issues will be resolved without some compromise, but I believe it is a tremendous advantage to our industry to have someone who competed in global markets everyday evaluate these important issues.
On September 12-14, the FIA convened the third annual Futures Leadership Summit in Zurich, Switzerland. More than 60 senior futures officials from the U.S., Europe, and Japan met to discuss issues of critical importance to intermediaries. I would like to thank Eurex for hosting the event again this year.
John Damgard is the president of the Futures Industry Association.