House Committee on Agriculture Chairman Glenn “GT” Thompson (PA-15) delivered the following opening statement at today’s full committee hearing, “For the Purpose of Receiving Testimony from the Honorable Michael S. Selig, Chairman, U.S. Commodity Futures Trading Commission.”
Remarks as prepared:
Good morning and welcome to our first hearing with Mike Selig, the Chairman of the Commodity Futures Trading Commission (CFTC).
Congratulations on your confirmation, Chairman Selig. We are looking forward to a robust conversation today about your agenda for the CFTC.
As we discussed at our reauthorization hearing in December, it is a transformative time for the Commission and for financial markets broadly.
The Commission has many new questions to grapple with, including: the integration of digital assets and blockchains, the increasing participation of retail customers, the growing prevalence of integrated business models, and the harmonization of rules between financial regulators, to name a few.
As it does so, Congress gave the CFTC an explicit statutory purpose to promote “responsible innovation.” It is the only financial regulator with such a mandate.
At the same time, the core mandate of the Commission remains unchanging: to protect commodity markets and their participants with a system of effective self-regulation overseen by the Commission. This is what we know today as “principles-based regulation.”
I look forward to the Chairman providing us with his views on these many policy issues, as well as his plans for agency operations, enforcement priorities, and reauthorization legislation.
While the rise in prediction markets has created an innovative new class of financial derivatives, it has also spawned significant confusion and debate about the role and authority of the Commission.
On the one hand, the Commodity Exchange Act is clear: the Commission’s authority is broad and deep. The definitions of commodity and swap are sweeping, and the Commission’s authority over transactions on registered exchanges is complete and exclusive.
As we learned from Dr. Sandor at our 50th Anniversary hearing last year, the original framers of the CFTC were intentional in providing the Commission with broad definitions and exclusive jurisdiction.
But understanding the Commission’s jurisdiction is not the end of the public policy questions which we must consider.
Many members have raised important questions about the rules for trading event contracts and the appropriateness of certain contracts to be listed for public trading.
Importantly, the Commission has significant tools currently at its disposal to address many of these concerns.
The Chairman has already issued guidance and has committed to issuing a rulemaking using those tools. I look forward to discussing those actions further today.
Where the Commission’s authority is found to be insufficient to meet its mandate to support responsible innovation and protect market participants, we will consider legislation as may be appropriate.
But first, the Committee must understand if such gaps exist.
Today’s hearing is another step in that process. The Chairman’s testimony will help our Members to further understand the law and the Commission’s authorities.
Prediction markets are important and newsworthy — however, they are not the only issue before the Commission.
Chairman Selig’s announced agenda for the year is a busy one, touching on a broad cross-section of issues important to the derivatives industry and the American public. I look forward to exploring it in detail today.
I want to thank the Chairman again for coming today. We look forward to your testimony.
With that, I will yield to Ranking Member Craig for her opening statement.
