Chairwoman Stabenow Announces Plans for CFTC Reauthorization, Encourages Finalizing Dodd-Frank Rules

Oversight of the Commodity Futures Trading Commission

Welcome to this oversight hearing of the Commodity Futures Trading Commission. Thank you to Chairman Gensler for being here. This hearing will look at the agency’s agenda for this year, its implementation of Wall Street reform, its efforts to protect customers since the failures of MF Global and Peregrine, and to lay out this Committee’s plans for the agency’s 2013 reauthorization.

The CFTC is responsible for making sure derivatives markets are safe for trading and free of manipulation. American farmers and co-ops, manufacturers, utilities, and businesses rely on these markets to manage their risk and shield consumers from price swings. In fact, more than 38 million Americans work at companies that use derivatives - a number that underscores the importance of the agency to our daily lives.

That is why the Wall Street Reform and Consumer Protection Act is so important. While the CFTC is further ahead than other agencies in implementing this law, there are still many outstanding issues to address, including a final rule on Swaps Execution Facilities, cross-border guidance, and compliance with the law. It is also important to get a progress report on the issues surrounding the failure of MF Global and Peregrine Financial Group.

I would like to make a couple of points on cross-border issues. It is imperative that the agency uses its authority on extraterritoriality wisely. It is critical that we prioritize safety and soundness, particularly in such interconnected markets, but the CFTC must also take into consideration the importance of global harmonization and international cooperation and find creative ways to merge these goals. A failure to meet this objective invites Congressional action, or worse, global retaliation.

With so many critical issues before the agency, I also want to acknowledge the serious budget constraints that the CFTC is experiencing - including the uncertainty of sequestration. I continue to be concerned that if the agency doesn’t have the tools it needs to implement reform and oversee these markets, we are asking for a repeat of the crisis that cost us so many jobs.

Finally, we will begin the discussion about reauthorization of the CFTC today. Senator Cochran and I will work together closely on this issue. The process will be open and bipartisan with any product being consensus-driven.

To that end, Senator Cochran and I will release a joint letter in the coming days that will invite the public’s input by May 1. These comments and recommendations will become part of the public conversation, particularly about commodity market oversight generally and the need for additional customer protections in the wake of failures at MF Global and Peregrine Financial.

These markets, whether for physical goods or financial products, must be orderly, transparent, competitive, and safe for trading. We must have markets that allow farmers, small businesses, and others to manage risk without fear. That also means we need our “cops on the beat" to have the resources they need to do their jobs.

Thank you, Chairman Gensler, for being here today. I look forward to working with you and the rest of the Commission this year on these important issues. I now turn to the Ranking Member for his comments.