"The CFTC at 50: Examining the Past and Future of Commodity Markets"
2025-03-25
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Source: Congress.gov
Participants
Transcript
That's what the phone says? Cool. The committee will come to order. Welcome and thank you all for joining today's hearing entitled CFTC at 50, examining the past and future of commodity markets. After brief opening remarks, members will receive testimony from our witnesses today and then the hearing will be open to questions. So I'll take the liberty of providing an opening statement. Good morning once again, and welcome to the House Committee on Agriculture. Fifty years ago, the Commodity Futures Trading Commission opens its doors and began operation as the world's first independent regulatory agency specifically focused on derivatives. From its early days of safeguarding agriculture future markets to today's global swaps markets, the Commission plays a critical role in adapting to an increasingly interconnected and dynamic world economy. Over the decades, well-regulated derivative markets have been an anchor of stability during periods of tremendous change, from financial crisis and global supply chain disruptions to technological advancements and market globalization. Today's hearing is to examine the full is to examine the full arc of the Commission's 50-year history and to assess its long-term success in meeting the purposes of the Commodity Exchange Act, which is chartered to implement. In a little over 100 words, Section 3 of the Act lays out an ambitious agenda to protect market participants and to ensure resilient, fair, and dynamic American markets. The first sentence reads, It is the purpose of this Act to serve the public interest through a system of effective self-regulation under the oversight of the Commission. In this sentence, Congress established the principle that
industry participants are partners in regulation. As partners, they have both rights and duties under the Act. This is an extraordinary feature of our regulatory system. By holding regulated parties accountable to outcomes and not just compliance checklists, Congress sought to expand the responsibility for promoting market integrity. The purpose continues, laying out the principles of market integrity and customer protection that are the bedrock of the Commission's work and essential to a healthy, functioning marketplace. Section 3 closes with the final purpose of the Commodity Exchange Act, quote, to promote responsible innovation and fair competition, end quotes. This, too, is a remarkable charge. Unique among federal financial laws, Congress has ambiguously set out the expectation that new ideas, new products, and new services should be welcomed across derivatives markets. It articulates the principle that the Commodity Exchange Act is not intended to be static or to govern static markets. As we examine the Commission's success over the past 50 years, we should start our inquiry here with the purpose of the Commodity Exchange Act and consider whether the Commission is filling that statutory mandate. Joining us are six expert witnesses whose careers span the history of the Commission. They were there for the most pivotal moments in the Commission's history, and their work shaped the markets that exist today. We are honored to have them with us today to share their insights into the work of the Commission and its impact on global derivatives markets. With that, I'd now like to welcome the distinguished ranking member, the gentlewoman from Minnesota, Ms. Craig, for any opening remarks that she would give. Well, thank you, Chairman Thompson, for holding this incredibly important hearing, not only to look back at the successful 50-year history of the CFTC, but also to look forward and see what's potentially ahead for the agency for the next 50 years.
This committee, more than most, has historically worked on a bipartisan basis when it comes to these issues. including those that impact farmers and ranchers across this country. That bipartisanship has also traditionally extended to the committee's work and oversight of derivatives, markets, and the CFTC. Whether it was the 2008 CFTC reauthorization or the crafting of the derivatives title of the Dodd-Frank Act, history has shown that this committee achieves great legislative outcomes when Republicans and Democrats work together. And I believe there is potential for more bipartisan success in this area, in this Congress. We all know that a well-regulated financial system keeps our country strong and prosperous while protecting Americans and their livelihoods. For 50 years, the CFTC has been the cop on the beat in overseeing U.S. derivative markets and making sure they work. not just for Wall Street, not just for the exchanges and clearinghouses themselves, but for Main Street Americans whose livelihoods are impacted by these markets every single day. But to have effective oversight over these markets and protect the customers who use them, take resources. Last July, at a subcommittee hearing on reauthorizing the CFTC, we heard from commercial end users of these markets about the agency's stagnant funding and how the agency needs sufficient resources otherwise its ability to ensure the integrity of the more traditional commodity markets for risk management purposes would be diminished. If the users of these markets get it, we should too. Even in the FIT 21 bill passed last year, the House recognized that the CFTC would need additional resources to implement the bill's new requirements and provisions.
I believe the funding provided by that bill was a good first step, but if we are going to hand the agency new responsibilities, we need to find a more permanent solution to the agency's funding needs. So I look forward to working with my friends across the aisle to develop a meaningful, durable plan that provides the CFTC with the resources that will allow it to bring a strong history of regulatory achievements to new markets, including digital assets like crypto.
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