World’s most senior regulator Timothy Massad to leave the CFTC on January 20

CFTC Chairman Timothy G. Massad yesterday stated that he has tendered to President Obama his resignation as Chairman of the U.S. Commodity Futures Trading Commission, effective on January 20, 2017. Mr. Massad issued the following statement:

“For the past two and a half years, I’ve had the privilege of working alongside the very talented CFTC staff, and I thank them for their dedication on behalf of the American people. I also want to express my appreciation to my fellow Commissioners, Sharon Bowen and Chris Giancarlo, for the constructive and collaborative engagement we have had throughout my tenure. I am also very grateful to President Obama for giving me the opportunity to lead this important agency.

I came to the CFTC with a number of priorities, and I am proud we have made significant progress in every area. We have largely finished implementing the regulatory framework for swaps, and have concentrated on the areas posing the greatest risk to the financial system. We have taken many actions to make sure commercial businesses can continue using the derivatives markets efficiently and effectively to hedge routine commercial risk and engage in price discovery.

We have improved international coordination by harmonizing rules in many areas, strengthening relationships, and working with other regulators on oversight of markets, all of which has reduced inconsistency and the risk of regulatory arbitrage. We have engaged in robust enforcement efforts to hold bad actors accountable and protect users of these markets. And we have taken action to address the new challenges and opportunities in the derivatives markets, particularly cyber threats, clearinghouse resilience, and the increased use of automated trading.

The United States has the greatest financial markets in the world, and sensible regulation is vital to ensuring that they remain strong, dynamic, and innovative. I am grateful to have had the opportunity to contribute to that important objective.

I also want to thank all of my fellow financial regulators as well as members of the House of Representatives and the Senate, with whom I have had the pleasure of working during my tenure. Most importantly, I want to express my deepest gratitude to my wife Charlotte and my two children, Emil and Jayne, for their love and support.”

Mr. Massad will remain a Commissioner for a few weeks in order to close out his office and handle administrative matters.

Among the accomplishments under his tenure, the Commission proposed and adopted margin requirements for uncleared swap transactions, which are perhaps the single most important element in swaps market regulation called for by the Dodd-Frank Act. Chairman Massad worked to make sure the rules focus on where the greatest risk exists, in transactions between large financial institutions, and are largely harmonized with other domestic and international requirements.

The CFTC also worked to ensure clearinghouses are stronger and more resilient through enhanced risk surveillance, new supervisory stress testing, and the development and completion of recovery and wind down plans and rules. The CFTC is also helping to lead a major effort involving regulators from around the world to look at clearinghouse resilience, recovery and resolution planning.

The CFTC has also taken a number of steps to reduce regulatory burdens on commercial businesses who use the derivatives markets to hedge risk, such as by reducing recordkeeping and reporting requirements, and through exemptions and clarifications to a number of swaps rules.

The Commission has taken a number of actions to ensure its regulatory framework is adapting to technological changes taking place in our markets. The Commission finalized rules to bolster protections against cyberattacks and other types of operational risk. It also proposed rules to guard against the risk of disruption caused by automated trading.

Chairman Massad has also placed a significant emphasis on increased international coordination and cooperation. In addition to the work on harmonizing margin rules, he reached a milestone agreement with the European Union that resolved longstanding issues regarding the recognition and oversight of clearinghouses. Also under his tenure, the Commission made registration of foreign exchanges as a “foreign board of trade” a priority and granted exemptions from registration to a number of foreign clearinghouses.

Finally, Chairman Massad worked to build bipartisan consensus within the Commission. Over 95 percent of the more than 600 votes taken during his tenure were unanimous.

Mr. Massad was sworn in as Chairman on June 5, 2014. Prior to his tenure, he served as Assistant Secretary for Financial Stability at the U.S. Department of the Treasury, overseeing the Troubled Asset Relief Program (TARP). Before becoming Assistant Secretary, he served as Chief Counsel for the program. Prior to joining Treasury, Mr. Massad served as a legal advisor to the Congressional Oversight Panel for the Troubled Asset Relief Program. As a lawyer in private practice, Mr. Massad was a partner in the law firm of Cravath, Swaine & Moore, LLP.