The Market Risk Advisory Committee (MRAC) convened on December 10, 2024, to advance three sets of recommendations for the U.S. Commodity Futures Trading Commission's consideration. The meeting focused on several critical issues, including risk management in U.S. Treasury markets, cyber resilience regulations for central counterparties, and the use of legal entity identifiers.
Commissioner Kristin N. Johnson highlighted the MRAC's achievements: "The MRAC’s success advancing three sets of recommendations adopted on Dec. 10 as well as the recommendations on derivatives clearing organization recovery and resilience and the report on concentration risk related to the declining number of futures merchant commissions adopted in April demonstrate the exceptional work of the members of the MRAC."
During its final meeting of 2024, MRAC discussed various topics such as Treasury market conditions with insights from Josh Frost, Assistant Secretary for Financial Markets at the U.S. Department of the Treasury; cyber resilience challenges presented by Sanjeev Bhasker and others; potential impacts of cyber threats and artificial intelligence from Todd Conklin; climate-related market risks with contributions from Sandra Lee and Chris Odinet; and financial education needs in rural areas addressed by Kim Ratcliff.
Following discussions, MRAC voted to forward reports on key issues:
1. Effective risk management practices for Treasury cash-futures basis trade.
2. DCO system safeguard standards for third-party service providers.
3. Adoption benefits and limitations of legal entity identifiers for beneficial account holders.
In April 2024, MRAC also advanced reports concerning FCM capacity trends and DCO recovery plans.
Commissioner Johnson expressed gratitude towards all contributors: "I want to thank each member...for their exceptional work this year in submitting important and thoughtful recommendations to the Commission." She acknowledged Alicia Crighton, Alessandro Cocco, Elizabeth King, Ann Battle, Biswarup Chatterjee among others for their leadership roles.
Johnson concluded by stating her commitment: "It is an honor...to serve as sponsor [of] MRAC...as we build and reinforce our regulatory framework."
