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CFTC's Berkovitz expresses optimism over agency's agenda

CFTC's Berkovitz expresses optimism over agency's agenda

18 October 2018 5:00pm EDT

Recently confirmed Commissioner Dan Berkovitz expressed optimism that the Commodity Futures Trading Commission will forge ahead on a "timely" agenda of issues in a bipartisan way.

Berkovitz, who was confirmed on Aug. 29 along with Dawn DeBerry Stump to create a full complement of five CFTC commissioners, spoke on Oct. 18 with FIA President and CEO Walt Lukken at the 34th annual Futures and Options Expo in Chicago.

The CFTC has seen five commissioners for only three months out of the last five years, and simply fielding a full slate of commissioners is itself a victory, Berkovitz said, because it avoids complications associated with open government rules known as the Sunshine Act. He added that having all five commissioners makes it easier for the agency to reach a bipartisan consensus.

"Anytime you have a 2-1 majority, it looks as if it's party lines," Berkovitz said. "It gives the appearance of the commission as divided on party lines and that's not necessarily the case. There's also greater pressure on the minority to not agree with the majority."

It's not just the flexibility provided by the quantity of the commissioners that matters, Berkovitz said. In the current makeup of the CFTC, "there's both trust and respect among the members of the commission, and that comes because many of us have worked together," he said. "That's really critical to getting things done in Washington."

Berkowitz also discussed several policy issues now pending at the agency. He stressed that "the issues on CFTC Chairman Chris Giancarlo's agenda "are very timely" and mentioned in particular the de minimis threshold for swap dealer registration, position limits, and a variety of cross-border regulatory issues including the recently issued white paper on cross-border regulation published by Giancarlo at the beginning of October. He commented that "cross-cutting to all those issues is the health of our markets," including liquidity and market fragmentation, which will likely remain a top priority of the CFTC in all rulemakings.

Berkovitz expressed confidence in his fellow commissioners and high hopes for the derivatives industry in general.

"I'm very optimistic about the industry," Berkovitz said. We have the strongest, most vibrant, most healthy capital formation and risk management markets in the world. … We're global leaders. I really want to help build on that and improve on that."

In the September issue of MarketVoice magazine, FIA's Walt Lukken stressed the value of a full complement of five CFTC commissioners and the dialogue it would bring at an important time for the derivatives industry.

"I can tell you from personal experience that this restriction seriously impairs the ability of the CFTC to do its job. Commissioners need to have relationships with fellow commissioners, just as they do with members of Congress and their staffs, industry advocates and other interested parties," Lukken wrote. "Not being able to discuss and deliberate prevents the implementation of effective public policy and leads us farther away from smart regulation. 

Berkovitz was most recently a partner at law firm Wilmer Hale, and previously served as the CFTC’s general counsel during the Obama administration and as a Senate staffer.

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