Securities Regulation Daily Agriculture committee favorably reports Tarbert to be CFTC chairman, Senate vote next
Monday, April 1, 2019

Agriculture committee favorably reports Tarbert to be CFTC chairman, Senate vote next

By Mark S. Nelson, J.D.

Treasury official Heath Tarbert is one step closer to becoming CFTC chairman. If confirmed by the full Senate, Tarbert will face a limited budget and pressing rulemakings on challenging topics.

The Senate Agriculture Committee voted to favorably report Heath Tarbert’s nomination to be the next CFTC chairman to the full Senate. Tarbert, who most recently served as Assistant Secretary for International Markets at the Treasury Department, was nominated to be chairman in January and would replace J. Christopher Giancarlo, whose term ends in April. The committee vote was to take place in the President’s Room near the Senate floor where a cloture vote was in progress. A vote by the full Senate on Tarbert’s nomination has yet to be scheduled.

Tarbert received a generally favorable reception from the Senate Agriculture Committee during his March confirmation hearing. Tarbert emphasized his bipartisan approach while noting that commodities futures, options, and swaps play a special role in the economy by moderating the prices of almost everything consumers buy. According to Tarbert, the Dodd-Frank Act resulted in "significant improvements" to swaps markets and the Title VII rules must be completed. He also said the CFTC must balance innovation in financial markets versus protecting markets and customers.

Chairman Pat Roberts (R-Kan) and Ranking Member Debbie Stabenow (D-Mich) both expressed concern about the CFTC’s budget and the Administration’s funding of farm initiatives within the jurisdiction of the Agriculture Committee. The CFTC’s budget in recent years has been significantly limited and will likely present challenges for Tarbert, if he is confirmed to be chairman. Senator Stabenow also cautioned that the CFTC must finish its Dodd-Frank Act rulemakings and ensure that its enforcement program remains robust.

Upon confirmation by the full Senate, Tarbert will face a variety of unfinished rulemakings that have either taken years for staff to develop or which otherwise have been slow to emerge in final form. Chief among these rulemaking priorities will be the handling of position limits. Tarbert testified that observers should remember these rules deal with "speculative" position limits and that bona fide hedgers should be able to use an exemption. The unfinished rulemaking on Regulation AT (Automated Trading) also awaits the CFTC’s next chairman.

In the CFTC’s post-Dodd-Frank Act era, Tarbert would be the second CFTC chairman to take the helm directly after working at the Treasury Department, and he would be the third CFTC chairman with prior Treasury experience in that time frame. Timothy Massad, the last CFTC chairman during the Obama Administration, had served as Assistant Secretary for Financial Stability at Treasury, a role that included oversight of the Troubled Asset Relief Program. Massad's predecessor, Gary Gensler, was Under Secretary of the Treasury for Domestic Finance and Assistant Secretary of the Treasury, roles he held nearly a decade before he became CFTC chairman which, as events happened, was one year before the Dodd-Frank Act became law.

MainStory: TopStory CFTCNews CommodityFutures Derivatives Swaps

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