Dear Mr. President: The CFTC Needs A Permanent Chairman, Not An Acting One

The CFTC Needs a Permanent Chair, Not an Acting One
John Lothian

John Lothian

Executive Chairman and CEO

July 7, 2021

Mr. Joseph Biden
President of the United States
The White House
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500

Dear Mr. President,

Almost 100 years ago President Calvin Coolidge said, “The business of (the United States of) America is business.” The first business from before our nation’s founding that drove its development and rapid expansion was the cotton business. Cotton was the commodity that created international trade from the eighth century onward. To understand the cotton business and many origins of issues we still struggle with today, including race relations, I recommend you read the book “Empire of Cotton” by Sven Beckert.

According to Beckert, “In 1820, the U.S. exported 167.5 million pounds of cotton, which was 32% of all U.S. exports. By 1850, 67% of U.S. cotton was grown on land that had not been part of the U.S. a half a century earlier.”

Because of the importance of cotton to our nation’s beginnings and all the other commodities it residually drove the production of, the U.S. commodity and related derivatives markets are among the most important in the world. I am writing to you today to urge you to appoint a permanent chairperson of the Commodity Futures Trading Commission.

My name is John Lothian and for the last 21 years I have published a newsletter helping the global derivatives and capital markets industries manage a historic level of change in their market structure. I have the privilege of also serving as a member of the Technology Advisory Committee of the CFTC.

Our industry is too important to the U.S. and its leadership necessary for the world for us to linger during the first year of your administration without a duly nominated and confirmed CFTC chairman. We damage ourselves and our global standing by leaving the title “acting” in front of the CFTC chairman’s name. Have we not had enough use of “acting” unconfirmed government department, agency or commission heads recently?

The name that is most often suggested as someone you should nominate is the man you named acting chair, CFTC Commissioner Rostin Behnam. I took an informal survey of the derivatives industry’s leading legal sources who are readers of the John Lothian Newsletter and asked them for suggestions of who would be a good CFTC chairman and Behnam’s name was the one most frequently given.

I also believe Commissioner Behnam would be the best choice for the permanent chair of the CFTC, though there are several names that my readers from the legal profession offered who would also be excellent choices. I urge you to quickly move to nominate Commissioner Behnam as the chair of the CFTC and work to secure his confirmation.

In May, the Futures Industry Association’s CEO & President Walt Lukken, a former “acting” chairman of the CFTC, wrote to you saying that “naming a permanent chair, as well as nominees for other open seats to the Commission, will allow for the important work of the agency to continue at full strength and speed.”

He added that “as the Administration sets forth its economic agenda, we urge you to recognize the importance of the derivatives markets to the economy and work to expeditiously nominate a permanent CFTC chair. This will ensure the Commission has an equal seat among the domestic and international regulatory community and guarantees a cop on the beat that protects the markets and its participants.”

Former CFTC Commissioner Fred Hatfield, who recently stepped down from the board of directors of Intercontinental Exchange, Inc., shared this with me: “The Administration should recognize the CFTC’s importance to financial stability, especially after the increased responsibilities of Dodd Frank. If I were advising President Biden, I would call up Chair (Debbie) Stabenow and ask her opinion and how quickly she can move the nominee.”

From across the industry, each of the legal practitioners I asked agreed there was urgency to have a permanent CFTC chairman named and confirmed.

Some of the legal sources commented on the potential second-class status the CFTC was being relegated to as former CFTC chairman and now SEC Chairman Gary Gensler takes up issues in which the CFTC has interest. Without the clout and status of a fully nominated and confirmed chair at the CFTC to uphold the interests of the Commission, our industry is at a strategic disadvantage.

And the universal response is that “our markets are too important for the CFTC to be relegated to such a status.”

Respectfully,

John J. Lothian
Publisher
John Lothian News

John Lothian Newsletter

Today’s Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

Now Read This

FIA Expo 2021 Video: ‘Everyone is Threatened’ by Disintermediation

FIA Expo 2021 Video: ‘Everyone is Threatened’ by Disintermediation

Robert Fitzsimmons, executive vice president at Wedbush Securities, spoke with John Lothian News at FIA Expo 2021 about his observations, insights and opinions on everything from the conference itself to the state of cryptocurrency today. As executive vice president, Fitzsimmons manages futures, fixed income groups, and securities lending.

Among the talking points from the conference, one topic of concern was the notion of disintermediation, which essentially cuts out the middle men — removing banks, brokers, or other third parties — allowing individuals to invest directly. 

FIA Expo Video 2021: CQG Pivots to Next Generation With New Technology Tools

FIA Expo Video 2021: CQG Pivots to Next Generation With New Technology Tools

Celebrating its 40th anniversary this year, CQG is notable for its long run offering real-time and historical trading data, along with technical analysis tools, but its leaders are in no mood to fade into the sunset. Instead, they are pivoting to take on the next generation.

In a video interview with JLN at FIA Expo 2021, Ryan Moroney, CQG Inc. president, and Pat Kenny, senior vice president, talked about a suite of trade execution technologies recently unveiled by the company. 

FIA EXPO 2021: Sam Bankman-Fried Says FTX Won’t Follow the Crypto Crowd

FIA EXPO 2021: Sam Bankman-Fried Says FTX Won’t Follow the Crypto Crowd

Sam Bankman-Fried, the “richest person in crypto” according to Forbes Magazine, is the founder of FTX, a leading exchange for buying and selling crypto derivatives. John Lothian News spoke with him at FIA Expo 2021, where he talked about how the crypto space has grown and changed, crypto versus “traditional finance,” and the latest trends, including NFTs.

Pin It on Pinterest

Share This Story