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From Securities Regulation Daily, December 21, 2015

Chair Massad ‘deeply disappointed’ in flat funding for CFTC

By Lene Powell, J.D.

CFTC Chairman Massad blasted legislators for approving a 2016 CFTC appropriation of $250 million, the same funding level as last year. He warned that the agency’s appropriation does not meet its “vast responsibilities,” given its oversight of large, complex markets.

“The failure to provide the CFTC even a modest increase in the fiscal year 2016 budget agreement sends a clear message that meaningful oversight of the derivatives markets, and the very types of products that exacerbated the global financial crisis, is not a priority,” said Massad.

Investment in safe markets. According to Massad, CFTC staff has worked hard to implement Congressional directives to rein in risk in the swaps markets, and the agency has taken steps to make sure its regulations do not excessively burden end users. However, strong rules are meaningless unless they are properly enforced, he said.

Massad had requested funding of $322 million to hire more staff, modernize technology, boost market surveillance, and carry out examinations of critical infrastructure. In testimony earlier this year, Massad said an adequate CFTC budget is a “small, but vital, investment” in market integrity. As the former overseer of the Troubled Asset Relief Program (TARP), Massad is especially attuned to systemic risk in the swaps markets. He noted that the amount of taxpayer dollars spent just to bail out AIG as a result of swap bets gone bad was over 700 times the CFTC’s 2015 budget.

Conaway statement. House Agriculture Committee Chairman K. Michael Conaway (R-Tex) reiterated his opposition to any increase in the CFTC budget until reauthorization is complete. By law, the CFTC is supposed to be reauthorized every 5 years, but the last reauthorization expired in 2013 and the agency has been operating under a continuing resolution since then. The Commission has “actively worked” to prevent reauthorization legislation from passing, said Conaway.

MainStory: TopStory CFTCNews CommodityFutures Derivatives Swaps

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