In recent remarks, CFTC Chair Michael Selig discussed a proposal to “future-proof” derivatives markets oversight through “principles-based regulation” and reducing compliance burdens. The chair criticized the implementation of the Dodd-Frank Act, contending its increased capital requirements contributed to consolidation among futures commission merchants and limited market access for smaller participants, such as farmers and energy producers. Selig expressed an interest in supporting innovation and outlined several agency directives including considering amending capital, margin and reporting requirements, reducing duplicative compliance burdens for entities registered with both the CFTC and the SEC, and exploring enhanced cross-margin practices, among others. His remarks also highlighted ongoing harmonization efforts on digital assets and commodities with the SEC through “Project Crypto” (covered by InfoBytes here).

Additionally, Selig announced the rollback of several climate-related initiatives, including disavowing a 2020 climate risk report, eliminating the Climate-Related Market Risk Subcommittee, dismantling the CFTC’s Climate Risk Unit, and withdrawing a 2022 request for information on climate-related financial risk (covered by InfoBytes here). Finally, Selig discussed prediction markets (i.e., event contracts), directing staff to draft guidance on event contracts and announcing plans to issue an advance notice of proposed rulemaking to solicit feedback on prediction market issues.