After almost seven years of Dodd-Frank reforms, the industry has adjusted, reacted and adapted to the new regulatory structure. Now with the new Trump administration in Washington, the FIA sees an opportunity to take stock of what’s been done and what might be the best plan going forward.
There’s no doubt the industry has struggled to comply with the spate of new rules from the CFTC, not to mention from other federal agencies. Walt Lukken, president and CEO of the FIA, has advocated for looking at three main areas of regulation that maintain regulatory reforms but allow for more sensible steps in enforcement for the industry. FIA reached out to the new administration with a letter recently advocating for smart regulation, access to global markets and fair competition and innovation. These themes will be discussed in detail at the upcoming FIA Boca conference in Boca Raton, Fla. set for March 14-17.
“We wrote the president a few weeks back to ask for a pause in the regulatory rules and review what we have in place,” Lukken said, adding that the organization is asking to focus on three main areas: smart regulation, global access to markets and competition and innovation.
Smart regulation means that CFTC regulations are proportional to the risks, with a cost-benefit analysis, he said.
As it pertains to open access, FIA is working to make sure that the political movement toward more protectionist policies do not adversely impact global markets. It’s also about avoiding rule redundancy on various policies as well.
“About one-third of the volume coming into the United States markets comes from foreign participants,” Lukken said. “And we know, in talking with our counterparts, it’s about the same crossing into Europe. So for us, it is important that there is cross border access.”
In terms of competition and innovation, Lukken said the FIA is looking to help regulators find ways to spur innovation that may not only help the industry participants, but also regulators themselves in monitoring activity.
“The regulatory structure is meant not only to prevent harm to the marketplace, manipulation or to prevent fraud, but also they are there to promote responsible innovation and fair competition,” he said. “So we think there are vast benefits for a regulatory structure that promotes innovation and benefits to the regulators as well. As these innovations occur, they may have better oversight tools.”
FIA Boca will once again kick off the FIA conference calendar. This year, the event is headlined by some top names in politics, technology and of course, markets. Keynotes will feature former British Prime Minister David Cameron, Lord Hague and Sen. David Perdue, as well as Digital Asset Holdings’ CEO Blythe Masters.
“This year, there are going to be opportunities for the industry to grow, to innovate,” he said. “I think we have been playing defense as an industry for a long time, dealing with regulatory issues and whatever unexpected events might have occurred such as Brexit. But this year, there might be opportunities for the industry to grow to innovate.”