How The CFTC Is Going Digital

At a Glance

  • Chairman Giancarlo highlights data, fintech initiatives to achieve "the best" regulation.

The Commodity Futures Trading Commission is modernizing. The analog to digital switch happened in financial markets years ago and continues today. CFTC Chairman J. Christopher Giancarlo is making it a mission that the agency keeps up the pace of fast-changing markets.

“In the future we see runaway digitalization of our markets. So much of our rules and rulebook was written for an analog world.  So we’ve got to modernize,” he told CME Group President Bryan Durkin at the 2018 Global Financial Leadership Conference.

Giancarlo highlighted a few measures the commission is taking on to digitize and efficiently use the vast amounts of data it monitors, including the creation of new office of data and analytics. “We get enormous amounts of data, and I fear that we undermine much of it. We need to change that dynamic,” he says. “We need to move away from analog and to the most sophisticated levels of data processing in order to keep pace with the pace of markets.”

The commission also launched Lab CFTC aimed at making itself more accessible to FinTech firms.

Giancarlo told Durkin that the shift to digitization doesn’t mean the the CFTC needs to create more rules, or less. The agency, he says, just needs to be in tune with the market.

“What we want to achieve in regulation is not the most extensive and prescriptive, and it’s not the least, it’s the best,” says Giancarlo.  “The regulation that is most in tune with the marketplace, that is most deeply informed by the marketplace will work the best and achieve the public policy goals we want.

“We need to take an 80 year old statute and a 40-year old agency and reform it for this new digital marketplace we are in, and it begins with understanding these changes.”

Evan Peterson is director of corporate marketing at CME Group and managing editor of OpenMarkets.

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