United States Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler and European Commissioner Michel Barnier met today in Chicago to discuss a range of issues concerning the oversight of commodity markets and the regulation of over-the-counter (OTC) derivatives. Chairman Gensler also accompanied Commissioner Barnier to meetings with the Chicago Mercantile Exchange, industry traders and intermediaries and the Chicago Climate Exchange.

Chairman Gensler and Commissioner Barnier reaffirmed their commitment to strong regulation and enhanced transparency of the commodity markets. They also expressed general support for the IOSCO Task Force on Commodity Futures Markets and related efforts in the G20, which are working to improve the regulatory oversight and transparency of futures and physical commodity markets. 

Commissioner Barnier and Chairman Gensler discussed position concentration in commodity markets and the role that position limits play in the oversight of physical commodity futures and swaps markets. They also discussed potential reforms to the Markets in Financial Instruments Directive and the Market Abuse Directive, which will assist in the overall efforts to reform commodity oversight in Europe.

They stressed the importance of ongoing efforts to reform the OTC derivatives markets, reviewing four key objectives set forth by the G20 in September 2009, namely clearing through central counterparties, trading on exchanges or electronic trading platforms, where appropriate, reporting and higher capital requirements for non-cleared swaps. 

Finally, they noted the importance for regulators to take into account technological developments in the markets and consider the effects of high frequency trading. 
“Today’s meeting built upon the United States’ strong partnership with the European Commission with regard to regulation of the swaps markets,” Chairman Gensler said after the meeting. “Based on the European Commission’s proposal for regulatory reform of the swaps marketplace as well as the Dodd-Frank Act passed in the U.S., I am confident that we will bring strong and consistent regulation to both the European and U.S. swaps markets. My staff is consulting frequently with Commissioner Barnier’s staff. We look forward to continue cooperation and coordination as both the U.S. and Europe implement comprehensive oversight of the swaps markets.”

Commissioner Barnier stated that “in drawing all the lessons from the recent crisis and ensuring that we bring transparency and stability back to the financial markets, I am committed to continue our reforms of OTC-derivatives and commodities markets. I look forward to the continued close co-operation with Chairman Gensler and his staff in order to ensure that Europe and the United States continue to make progress in parallel on these important matters”.

Press release