On March 15, Chris Giancarlo, the acting chairman of the Commodity Futures Trading Commission, announced a three-pronged plan to renovate derivatives regulation that he called Project KISS, which stands for “keep it simple, stupid.”
Giancarlo, who has been nominated to chair the agency by President Trump, said the CFTC must “reinterpret its regulatory mission” in line with the goals of the Trump administration, focusing on three main themes: fostering economic growth, enhancing U.S. financial markets, and “right-sizing” the CFTC’s regulatory footprint.
This will include an agency-wide review of CFTC rules, regulations and practices to make them “simpler, less burdensome and less costly,” Giancarlo said. He emphasized that this review is not aimed at repealing regulations, but rather applying these rules in ways that put less drag on the U.S. economy.
Giancarlo, who gave the speech at FIA’s 42nd International Futures Industry Conference in Boca Raton, also announced steps to restructure the agency by moving market surveillance functions into the enforcement division and creating a new office of “market intelligence” that will seek to understand trends in trading behavior and market dynamics.
Giancarlo also said the CFTC should continue to work with its overseas regulatory counterparts and international standard-setting bodies. “As our regulatory counterparts continue to implement swaps reforms in their markets, it is critical that we make sure our rules do not conflict and fragment the global marketplace,” he said.
He also vowed to change the CFTC’s rule-making process, focusing on “greater care and precision in rule drafting, more thorough econometric analysis, less contracted time frames for public comment, and a reduced docket of new rules and regulations to be absorbed by market participants.”
In May, the CFTC followed up on Giancarlo’s pledge by issuing a formal call for external input on Project KISS. Market participants and other interested parties have until Sept. 30 to submit their recommendations.
