As Acting Chairman of the Commodity Futures Trading Commission (CFTC), Caroline D. Pham welcomed the International Organization of Securities Commissions’ (IOSCO) final report on pre-hedging. She stated, "Pre-hedging is a well-established risk management practice, underpinned by extensive industry guidance and expertise. I am proud that the CFTC played an active role in IOSCO’s efforts, contributing to the review of existing codes and practices, the survey of members and industry participants, the formal consultation process, and the stakeholder roundtables."
Pham highlighted that IOSCO’s report recognizes that many member jurisdictions already have rules in place regarding pre-hedging. These are supported by industry codes such as the FX Global Code, the Global Precious Metals Code, and standards from organizations like the Financial Markets Standards Board for large trades in fixed income, currencies, and commodities markets. She noted, "Importantly, IOSCO has made clear that its recommendations are designed to support existing rules and regulations, recognizing that many jurisdictional frameworks are already achieving the intended outcomes. IOSCO has also made clear that its recommendations, which apply across asset classes, align with these industry codes and standards. I believe this alignment is critical to avoid disruption of markets that are essential to the real economy, mitigate systemic risk and promote financial stability."
Pham further stated that IOSCO’s report reinforces standards set by the CFTC for entities under its jurisdiction. She clarified: "For the avoidance of doubt, the views expressed in the IOSCO report reflect the CFTC’s position on pre-hedging. In light of this, I do not anticipate the need for further CFTC rulemaking or guidance to address IOSCO’s recommendations."
The statement comes as regulatory bodies continue efforts to harmonize global financial market practices.
