Futures and Derivatives Law Report May 2022 | Volume 42 | Issue 5
whether they remain fit for purpose . We will address new and emerging issues and risks thoughtfully , deliberately , and through active engagement . 36
This emphatic statement should put the industry on notice that current regulations , even recently revised ones , may be subject to change under Chairman Behnam . In order to have a voice on any changes , market participants should proactively engage with the Chairman and the new Commissioners on what is , and is not , working with the swap regulatory regime .
As the agency reevaluates current regulations , it will continue to insist upon , and it will use the enforcement program to ensure , full compliance with current rules . In his testimony for his nomination hearing before the Senate Committee , Behnam emphasized the need for customer protections and corporate compliance programs , stating “[ i ] f confirmed , I will prioritize policy that invigorates a culture of compliance reinforced by an enforcement program that roots out fraud , manipulation , and market abuse , and sends a strong , clear message to bad actors , particularly at a time of rapidly advancing technology .” 37
4 . RETAIL PARTICIPATION AND DISINTERMEDIATION
One of the biggest changes observed in the financial industry today is the increase in retail ( or individual ) participation , brought about by the ease of market access through electronic platforms and the explosion of interest in digital asset trading . This has led to the proposal of new market models that allow for direct market access , leading to greater disintermediation of the markets . One derivatives clearing organization (“ DCO ”) recently proposed to the CFTC an amendment to its order of registration that would allow it to offer margined products to retail participants without the reliance on a futures commission merchant (“ FCM ”). 38 The CFTC has opened this proposal up for public comment . 39 Chairman Behnam described the agency ’ s approach to this proposal as being “ careful , patient , and deliberative .” 40 The agency will rely heavily on the public comments it receives to guide its decision-making . As Behnam noted that “[ i ] t has never been , nor should it ever be our job to choose winners or losers in the industry . Only the market and the customer can do that .” 41
Increased retail participation and disintermediation , together and individually , are groundbreaking and may exemplify the future of financial markets . The CFTC , under Chairman Behnam , will be proactive in addressing these seismic changes to ensure they are sufficiently covered by a regulatory framework . Enforcement will take a potentially greater role , as least with respect to retail market participants , to address the chairman ’ s concern of overly risky market behavior and lack of adherence established rules and appropriate limits .
III . ENFORCEMENT OVERVIEW
During FY 2021 , while experiencing a period of transition , the Enforcement Division filed 55 separate actions , resulting in orders directing total monetary relief of approximately $ 1 billion . 42 It filed an additional 19 actions between the end of the fiscal year and the end of the calendar year , several of which are worth noting because they exemplify the themes in enforcement that have been developing over the past year and will continue to develop under Chairman Behnam . Those emerging themes , as il-
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