May 2022 | Volume 42 | Issue 5
II . REGULATORY AGENDA 2022 : A FOCUS ON NEW MARKETS AND MAINTENANCE OF OLD RULES
A . A NEW COMMISSION
The presidential election brought numerous changes to the CFTC , resulting in an almost complete turnover of Commissioner seats . In the first three months of 2021 , Republican Chairman Heath Tarbert stepped down and departed the agency , 6 along with fellow Republican Commissioner Brian Quintenz . 7 Meanwhile , Democratic Commissioner Rostin Behnam was named acting Chairman 8 and fellow Democratic Commissioner Dan Berkovitz stepped down to become General Counsel at the U . S . Securities and Exchange Commission (“ SEC ”). 9 By the end of the year , the only remaining Commissioner , Republican Dawn DeBerry Stump , announced her intent to depart the agency . 10
On September 13 , 2021 , President Biden nominated Behnam to serve officially as the Chairman of the Commission and nominated Kristin Johnson and Christy Goldsmith Romero to fill the two remaining Democratic Commissioners seats . 11 Then , on December 15 , shortly after Commissioner Stump publicly announced her departure from the agency , President Biden named Republican nominees Caroline Pham , former Special Counsel and Policy Advisor to former Republican Commissioner Scott O ’ Malia , and Summer Mersinger , current Chief of Staff for Republican Commissioner Stump and former Director of the Commission ’ s Office of Legislative and Intergovernmental Affairs , to fill the seats opened by Commissioners Stump and Quintenz . 12 After sailing through a Senate confirmation hearing , all
Futures and Derivatives Law Report
four nominees were unanimously confirmed by the Senate on March 28 , 2022 . 13
B . A NEW AGENDA
In recent public remarks , Chairman Behnam has laid out an ambitious agenda covering relatively new areas for the agency , such as digital assets , climate change , and retail participation in the markets , while at the same time maintaining a focus on Dodd-Frank rules and regulations . 14 While the Chairman ’ s focus will be on moving the agency forward , he has consistently maintained the need for a strong enforcement program backing agency initiatives . 15 The backgrounds of the incoming Commissioners indicate they too will support an active and aggressive enforcement program . The following describes in greater detail some of the regulatory initiatives that can be expected under Chairman Behnam and notes how they will impact the enforcement priorities .
1 . DIGITAL ASSETS
Over the past two years , interest and investment in digital assets has exploded , but the regulatory framework applicable to them remains unclear . The CFTC has consistently taken the position that it has regulatory authority over digital asset products that are derivatives and enforcement jurisdiction over the digital asset spot markets , meaning the ability to investigate and civilly prosecute individuals and entities engaged in fraud and manipulation involving digital assets that are commodities . 16 As Chairman Behnam recently noted ,
[ i ] t is understood that the Commission may review cash market operations of exchanges and their members , and prevent and act against fraud or manipulation by any person in such markets .
2 K 2022 Thomson Reuters