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FIA Statements and Testimony
| FIA’s Damgard Testifies at Dodd-Frank Hearing (May 25, 2011)FIA President John Damgard discussed some of the adverse consequences of the extraterritorial impact of the Dodd-Frank Act at a May 25 hearing of the House Agriculture Committee’s subcommittee on general farm commodities and risk management. Damgard focused on two specific examples: the financial and operational burdens caused by the requirement that foreign clearinghouses register with the CFTC in order to clear swaps traded by U.S. counterparties, and the costs of a position limit regime in U.S. markets that is not matched in other jurisdictions. Damgard also raised an issue with the rulemaking process as a whole, urging the CFTC to provide a 60-day comment period on the entire “mosaic” of proposed rules before they are finalized.  Click Here for Oral Statement
Click Here for Written Testimony
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FIA President Testifies on Dodd-Frank Implementation (Feb. 15, 2011) Speaking before the House Agriculture Subcommittee on Risk Management, FIA President John Damgard called for a “measured” implementation of the derivatives reforms contained in the Dodd-Frank Act and described a number of problems with the rules proposed by the Commodity Futures Trading Commission. Oral Statement
Written Testimony |
 The FIA Principal Traders Group welcomes the joint staff report and commends the staffs of the two agencies for their thorough analysis. By providing a factual basis for discussion, the report makes an important contribution to the public debate on how to make markets safer in the future. One important step regulators can take, as highlighted in the recommendations on market access risk controls that the Futures Industry Association published in April, is to promote trade certainty in exchange error trade policies. The FIA PTG is pleased to note that the joint staff report identified trade certainty as one of its "lessons learned." The events of May 6 were not acceptable. The FIA PTG looks forward to continuing our member firms' cooperation with regulators in helping to identify sensible steps that can be taken to improve market quality and make markets safer for all participants. In evaluating any potential policy responses to the events of May 6, the FIA PTG encourages regulators to base their deliberations on empirical evidence and rigorous analysis.
The FIA Principal Traders Group provides a forum for firms trading their own capital to identify and discuss issues confronting the PTG community. The group also works to define common positions on public policy issues and advance the group's collective interests through the FIA; improve public understanding of the constructive role played by the wide variety of individual trading groups in the exchange-traded derivatives markets; and promote cost-effective, transparent access to U.S. and non-U.S. markets. The Futures Industry Association is a principal spokesman for the commodity futures and options industry. The FIA's regular membership is comprised of approximately 30 of the largest futures commission merchants in the U.S. The FIA's associate members include representatives from virtually all other segments of the futures industry, both national and international. For more information, please contact Will Acworth (wacworth@futuresindustry.org) at (202) 466-5460 or visit the FIA's website at www.futuresindustry.org or the FIA PTG's website at www.futuresindustry.org/ptg.
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“The FIA congratulates Congress and the President on this historic achievement. We especially thank Chairman Dodd and Chairman Frank for their leadership in this effort and the members of the House and Senate Agriculture Committees and Chairman Peterson and Chairman Lincoln for all their work on the derivatives title of the legislation. In the months ahead we will work with all the regulators by providing the information they need to ensure that our markets remain the safest and most competitive in the world. As an industry, we have many challenges ahead in educating users and transforming our infrastructures. We will draw on our expertise in the exchange traded and cleared markets to help move derivatives markets to the next stage.” |
| FIA Statement on Conclusion of House-Senate Conference Committee (June 25, 2010) WASHINGTON, D.C.—June 25, 2010—The Futures Industry Association today released the following statement by FIA President John Damgard following the conclusion of the House-Senate Conference Committee on the financial reform bill. “The FIA congratulates the members of the House and Senate Conference Committee on their historic achievement and thanks the members for the hard work that went into the consideration of the conference report. This was a marathon process and it required tremendous persistence, patience and cooperation. We especially thank Chairman Frank and Chairman Dodd for their leadership in the conference, and the members of the House and Senate Agriculture Committees and Chairman Peterson and Chairman Lincoln in particular for all their work on the derivatives title of the legislation.” |
| CFTC Issues Statement on Intraday Position Limits (May 7, 2010)The Commodity Futures Trading Commission on May 7, 2010 issued an advisory reminding market participants of their obligations to comply with speculative position limits on an intraday basis, rather than only on an end-of-day basis. “A trader whose position exceeds the applicable speculative position limit at any time during the day is in violation of the Commodity Exchange Act and CFTC regulations, even if the position is subsequently reduced to a level within the applicable limit by the close of the market for that day,” the CFTC said. “Accordingly, intraday speculative position limit violations have been and continue to be subject to Commission enforcement action as violations of the Act.” Click here for the statement |
The Motion Picture Association of America is seeking to discourage the Commodity Futures Trading Commission, the federal agency that regulates futures markets, from approving a new type of futures contract based on box office receipts. In its letters to the CFTC and statements to the press, the MPAA has asserted that futures trading is a form of “legalized gambling” that has no commercial interest or value to the public. Nothing could be further than the truth. Futures markets have proven to be vitally important mechanisms for risk management, as evidenced by the phenomenal growth in the use of futures contracts by a wide range of commercial and industrial enterprises, both here and abroad. The MPAA also claims that these new contracts could lead to “rampant speculation and financial irresponsibility.” It is clear that the MPAA is not familiar with the futures markets or the regulatory framework within which they operate. One of the principal lessons of the recent financial crisis is that futures markets performed flawlessly under the highest levels of stress. This was due in no small measure to the fact that futures markets operate within a regulatory scheme that has been developed and perfected over many decades. No one can argue that the movie-making business is without risk or that there is no need for effective risk management tools. The potential introduction of innovative instruments for managing that risk should be applauded rather than criticized. The FIA has no view on whether or not the proposed movie futures contracts will succeed. We encourage the CFTC to evaluate these applications on their merits and let the marketplace decide. |
| FIA Statement on Passage of H.R. 4713 (Dec. 11, 2009)Washington, D.C. —Dec. 11, 2009—The Futures Industry Association today issued the following statement in response to the passage of H.R. 4713, The Wall Street Reform and Consumer Protection Act of 2009. The Futures Industry Association has long favored closing gaps in the regulation of derivatives and promoting the value of the price discovery and hedging benefits provided by futures markets. The legislation passed today by the House of Representatives is an important step in this process. We look forward to working with the Senate to further improve this legislation. |
FIA Statement on CFTC/SEC Regulatory Harmonization (Sept. 2, 2009)On Sept. 2, 2009, the Futures Industry Association participated in a joint meeting of the Commodity Futures Trading Commission and the Securities and Exchange Commission to discuss harmonizing the federal securities laws and the Commodity Exchange Act. The FIA gave a brief statement outlining its views on the differences in regulation that could be harmonized as well as those that should be maintained.
Click Here for the FIA Statement |
| FIA Urges CFTC to Consider Market Migration Risks in Setting Position Limits August 5, 2009 -- The Futures Industry Association testified before the Commodity Futures Trading Commission on the third day of hearings regarding speculation in the energy markets and urged the agency to consider the risk of “market migration” if it applies restrictive position limits in the futures markets. “Repeatedly we are told by our members, in the most emphatic terms, that futures markets and their inherent price discovery function are moveable,” said Mark Young, a partner in the Washington office of Kirkland and Ellis who testified on behalf of the FIA. The FIA also reiterated its view that the CFTC should preserve the position limit exemptions for swap dealers that use futures to hedge risks in their OTC swap positions. Click Here for FIA Testimony |
FIA welcomes the CFTC’s announcement of public hearings on how best to accomplish its mission of ensuring the “fair, open and efficient functioning” of futures markets. FIA has consistently supported efforts by the CFTC to ensure the integrity of the price discovery process, and we want to help Chairman Gensler continue to achieve this goal. FIA would be concerned by any measures to bar legitimate participants from these markets or that would make it less efficient for U.S. corporations to use futures as a tool for managing price risk. FIA hopes the CFTC's hearings will address public concerns about the impact of speculation on futures market prices without causing these markets to become less fair, open and efficient.
The FIA is the leading trade organization for the futures industry. Its membership includes the world’s largest futures brokers as well as leading derivatives exchanges from more than 20 countries. For more information, please contact Will Acworth (wacworth@futuresindustry.org) at (202) 466-5460.
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“The FIA strongly supports each of the reforms that the CFTC has adopted in its acceptable practices for the governance of self-regulatory organizations,” said FIA President John Damgard. “These reforms are an essential response to the industry’s transformation over the last decade and should enhance the reputation of self-regulation throughout the futures industry.” “I want to thank the CFTC commissioners—both past and current—and the CFTC’s staff for their perseverance in pursuing these reforms. I also want to thank the board of the FIA and in particular our public directors for their good counsel, and all the exchanges and other parties who participated in the consultation process and dedicated their time towards the ultimate goal of making self-regulation work better.” “Our work is not done, however. All of us must work with the CFTC to ensure that self-regulation fosters public confidence in our industry’s fairness and impartiality.” The CFTC’s guidelines establish that the boards of directors of futures exchanges should have at least 35% public directors. These directors cannot have any material relationship with the exchanges or their member firms. Exchanges also should establish “regulatory oversight committees” composed entirely of public directors to oversee their self-regulatory functions, and exchange disciplinary panels should have at least one public member. Exchanges are not required to comply with the guidelines, but if they do not they must demonstrate to the CFTC how their alternative arrangements comply with requirement to minimize conflicts of interest. The CFTC’s review of exchange governance began in 2004, when the agency began considering how structural changes in the industry were affecting the self-regulatory system. Those changes included the shift in exchange ownership from members to investors, their transformation into profit-seeking enterprises, and the increased competition among exchanges. The FIA filed numerous comment letters over the years in support of the CFTC’s review and offering specific suggestions for reform. The FIA also published a white paper in June 2004 explaining why the industry’s self-regulatory system needed to be updated in light of the many changes taking place within the industry and across derivatives markets in general, and participated in a public hearing held by the CFTC in February 2006 to discuss issues related to self-regulation. |
FIA Statement on Senate Confirmation of Gary Gensler as CFTC Chairman (May 19, 2009)Washington, D.C.—May 19, 2009—John Damgard, president of the Futures Industry Association, today issued the following statement in response to the Senate’s confirmation of Gary Gensler as chairman of the Commodity Futures Trading Commission. This is welcome news indeed. Gary Gensler is extraordinarily well qualified to serve as the next chairman of the CFTC, and we look forward to working with him as the CFTC participates in the efforts by the Administration and the Congress to develop a comprehensive regulatory framework for derivatives. Click here for a .pdf version |
| FIA Testifies on Draft Derivatives Bill before House Agriculture Committee (Feb. 3, 2009)  Washington, D.C.—Feb. 3, 2009—FIA President John Damgard testified before the House Agriculture Committee on Feb. 3 regarding the discussion draft of the Derivatives Markets Transparency and Accountability Act of 2009. Damgard expressed support for those provisions strengthening the CFTC’s market surveillance capabilities, deterring price manipulation, and encouraging competition. Damgard warned, however, that many of the bill’s provisions would drain market liquidity, make hedging more costly, curb innovation and discourage trading in the U.S. He expressed especially strong opposition to the provisions that would greatly expand the scope of speculative position limits, mandate clearing of all OTC transactions, and ban naked credit default swaps.
Please click here to download PDF of testimony Please click here to download PDF of section-by-section analysis |
| FIA Testifies on Credit Derivatives Clearing (Dec. 8, 2008)Washington, D.C.—Dec. 8, 2008—FIA President John Damgard discussed several issues related to the clearing of credit derivatives in testimony today before the U.S. House Agriculture Committee. Damgard made three main points in his written testimony. First, the interests of clearing firms must be recognized in the proper structure of any successful CDS clearing operation. Second, government agencies should not make CDS clearing a “jurisdictional football.” Third, merging the Commodity Futures Trading Commission and the Securities and Exchange Commission will not answer the financial market regulatory concerns raised by Congress in recent months. Download PDF version of Damgard testimony Hearing schedule and list of witnesses
http://agriculture.house.gov/hearings/schedule.html |
| FIA Statement on CFTC Index Trader Report (Sept. 11, 2008)Washington, D.C.—Sept. 11, 2008—The Futures Industry Association today issued the following statement from FIA President John Damgard regarding the Commodity Futures Trading Commission’s staff report on commodity swap dealers and index traders: First, we applaud the CFTC's efforts to deepen the public’s understanding of the dynamics of the commodity futures markets. Today’s report sheds more light on how these markets function, and that is good for everyone who uses these markets and the public at large. |
| FIA Statement on S. 3268, the Stop Excessive Energy Speculation Act of 2008 (July 17, 2008)Washington, D.C.-July 17, 2008-The Futures Industry Association today released the following statement expressing its opposition to S. 3268, the bill titled "Stop Excessive Energy Speculation Act" that is now pending in the U.S. Senate. The Futures Industry Association agrees with the judgment adopted in recent congressional testimony by Federal Reserve Chairman Ben Bernanke: speculation is not the cause of high energy prices. Many Americans are suffering from the increased cost of energy. A comprehensive national energy policy is essential to reduce that suffering. |
| FIA Releases Statement on CFTC Energy Markets Oversight (June 10, 2008)WASHINGTON, D.C.-June 10, 2008- The Futures Industry Association strongly supports the recent efforts of the Commodity Futures Trading Commission to bolster price transparency and enhance market surveillance in commodity and energy futures markets. Commodity and energy markets present an ever increasing regulatory challenge for the Commission, as trading platforms become more global and inter-linked through modern technology. As part of its ongoing leadership in this area, the Commission is conducting its first meeting on its Energy Markets Advisory Committee on June 10, 2008. FIA is submitting this short statement for the record of that meeting. |
| FIA Testifies Before House Agriculture Subcommittee on CFTC Reauthorization (Sept. 26, 2007)FIA President John Damgard testified at a Sept. 26 hearing of the House Agriculture Subcommittee on General Farm Commodities and Risk Management on the reauthorization of the Commodity Futures Trading Commission. The testimony emphasized three general points: the FIA endorses CFTC reauthorization, supports the CFTC's exclusive jurisdiction, and opposes major changes to the Commodity Exchange Act. |
| FIA's John Damgard Testifies at CFTC Hearing (Sept. 18, 2007)FIA President John Damgard testified at a hearing on energy market oversight at the Commodity Futures Trading Commission on Sept. 18. |
For many years, FIA has expressed its concern about the lack of meaningful competition among U.S. futures exchanges and their clearing facilities. To address this situation, FIA has championed the entry of new U.S. exchanges and clearing facilities as well as the creation of new U.S. market structures. Recently, FIA has considered these issues in light of the proposed CME-CBOT merger. FIA acknowledges that the merger could have short-term cost savings and operational efficiencies. In FIA’s view, however, the CME-CBOT merger would concentrate significant market power in the new CME Group, substantially lessen competition among U.S. futures exchanges, and raise even higher the barriers to entry for new competitors. FIA understands that various market structure alternatives could potentially overcome the anti-competitive effects of the merger and is considering internally the efficacy of those alternatives as well as their impact on the long-term competitive landscape of the U.S. futures markets. About FIA
FIA is the national trade organization for the futures industry. Its membership includes more than 40 of the largest futures commission merchants. FIA estimates that its members are responsible for more than 90 percent of all public customer business executed on U.S. contract markets. ### For more information, contact: Mary Ann Burns or Will Acworth
maburns@futuresindustry.org; wacworth@futuresindustry.org
202-466-5460 |
"FIA applauds the Commission's action to strengthen futures exchange self-regulation. FIA has participated extensively in the Commission's multi-year consideration of major reforms that would serve the needs of all market participants. While the final package does not go as far as we recommended in some areas, I believe the reforms will enhance public confidence in the integrity of U.S. futures exchange markets, when implemented." About FIA
FIA is the national trade organization for the futures industry. Its membership includes more than 40 of the largest futures commission merchants. FIA estimates that its members are responsible for more than 90 percent of all public customer business executed on U.S. contract markets. ### For more information, contact: Mary Ann Burns or Will Acworth
maburns@futuresindustry.org; wacworth@futuresindustry.org
202-466-5460 |
FIA Statement on Foreign Board of Trade Issue for CFTC Hearing (June 27, 2006)The Commodity Futures Trading Commission scheduled a June 27 hearing to discuss the issue of foreign boards of trade. While the Futures Industry Association will be filing a more extensive formal comment letter with the Commission, this statement summarizes the views of the association.
» Transcript of the CFTC Public Hearing held June 27 |
| Refco Statements (Oct. 20, 2005) |
| FIA President John Damgard Testifies Before Senate Banking Committee (September 8, 2005)FIA President John Damgard testified on September 8 at a Senate Banking Committee hearing on the reauthorization of the Commodity Futures Trading Commission. He addressed four main issues: off-exchange retail foreign currency transactions; security futures; SRO transparency and governance; and competition among exchanges and clearinghouses. |
Proposed Amendments to Commission Rule 1.55(d)(1)—Distribution of Risk Disclosure Statement (November 9, 2004)69 Fed.Reg. 64873
Filed December 7, 2004
» FIA Comment letter |
| John Damgard statement before the U.S. House of Representatives CommitteeOcotber 3, 2003 -- "Mr. Chairman, members of the Committee. On behalf of the Futures Industry Association (FIA), I want to thank you for the opportunity to appear before you today to discuss the application of the U.S. Futures Exchange LLC for designation as a contract market. FIA is a principal spokesman for the commodity futures and options industry. FIA’s regular membership is comprised of approximately 40 of the largest futures commission merchants (FCMs) in the United States. Among its associate members are representatives from virtually all other segments of the futures industry, both national and international. Reflecting the scope and diversity of its membership, FIA estimates that its members effect more than 90 percent of all customer transactions executed on United States contract markets." |
John Damgard, president of FIA agreed, "Derivatives industry participants including exchanges, vendors and financial institutions are all represented by our membership. Working together we will succeed in further developing and promoting standardization." The FIA/FPL Statement of Understanding is available on the FPL website at www.fixprotocol.org and the FIA website at www.futuresindustry.org/downloads/Standards/FIXAgreement2003July.pdf. About FIX Protocol Ltd.
FIX Protocol Ltd. is a non-profit organisation that owns the intellectual property rights of the Financial Information eXchange protocol (FIX), which is provided free in the public domain. FIX is a globally recognized messaging standard enabling the electronic communication of pre-trade and trade messages between financial institutions, primarily investment managers, broker/dealers, ECNs and stock exchanges. For more information, see www.fixprotocol.org. About Futures Industry Association
The FIA is a U.S.-based international association that acts as a principal spokesman for the futures and options industry. Its membership includes approximately 40 of the largest futures commission merchants. FIA estimates that its members are responsible for more than 90 percent of all public customer business executed on U.S. contract markets. Contact
Mr. Jim Northey at: +1 (312) 622-7630 (FPL)
Mr. John Damgard at: + 1 (202) 466-5460 ext. 104 (FIA)
Mr. Tom Jordan at: + 1 (212) 652-4460 (FPL Program Office) ### For more information, contact: Jim Northey
+1 (312) 622-7630 |
“We recognize the desire to proceed in a fashion that does not delay the implementation of the CBOT-CME clearing link. We certainly see a number of positive aspects to this link, such as the potential cost savings. However, we believe it is important for the CFTC to carefully consider the implications of determining that the implementing rules comply with the Commodity Exchange Act. A preliminary reading of the CBOT submission suggests that the proposed regulation 701.01 raises some important legal and policy issues. The CBOT is asking the CFTC for authority to order clearing firms to abrogate the existing contractual relationships between themselves and the clearinghouse. These powers could be used not only in relationship to the CBOT-CME link but at any future time. This is a very broad rule, and we believe the industry deserves more time to consider its implications. Rather than ask the CFTC to act on such a rapid timetable, the CBOT has the option to self-certify its rules, as it has done with other parts of the clearing link implementing rules.” The FIA is a U.S.-based international association that acts as a principal spokesman for the futures and options industry. Its membership includes approximately 40 of the largest futures commission merchants. FIA estimates that its members are responsible for more than 90 percent of all public customer business executed on U.S. contract markets. ### For more information, contact: Will Acworth
wacworth@futuresindustry.org
202-466-5460 |
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