Top Senate Dem says derivatives regulator still underfunded

A top Senate Democrat argued Wednesday that the Commodity Futures Trading Commission (CFTC) needs more resources to effectively regulate derivatives and maintain market stability.

Sen. Debbie Stabenow (Mich.), chairwoman of the Senate Agriculture Committee, said the 2015 spending bill released on Tuesday underfunds the agency and tacks on new restrictions at a time when the regulator is being asked to do more work.

{mosads}The $1.1 trillion compromise spending measure released Tuesday night includes a a 10 percent increase in funding for the CFTC to $250 million, up from $215 miilion last year.

During a hearing on the oversight of the agency, she said that the Dodd-Frank financial law aimed at boosting CFTC’s effectiveness in overseeing and regulating the massive derivatives market isn’t getting any help from congressional appropriators. 

“Dodd-Frank is being undermined every day that we underfund the agencies responsible for enforcing the law,” she said Wednesday.

“Congress must come up with a long-term commitment to fund the CFTC,” she said. 

The hearing focused on CFTC’s plans to complete its responsibilities under Dodd-Frank.

“Failing to properly fund the commission leaves our families, farmers, ranchers and businesses vulnerable to bad actors.”

Since Timothy Massad, who testified at the hearing, was confirmed by the Senate as chairman, along with three commissioners in June, the agency has stepped up its efforts in proposing or finalizing some long-awaited end-user relief rules, Stabenow said.

The commission also has taken a strong stance against foreign exchange benchmark fraud, recently issuing more than $1 billion in fines.

“Despite recent successes, the commission has much enforcement work to do in 2015 and beyond,” Stabenow said. 

“Some of the most critical work lies ahead on rules that have serious consequences to all market participants,” she said.

“The commission must have a set of rules that can be agreed upon by global regulators, while also keeping U.S. markets from being at risk to broader threats.”