By Douwe Miedema
WASHINGTON Jan 24 Commissioner Jill Sommers
said she would step down from the U.S. Commodity Futures Trading
Commission, leaving the regulator firmly in Democratic hands as
it puts the last building blocks of a Wall Street overhaul in
Sommers, one of two members of the CFTC's Republican
minority, had often been critical of the agency's decisions as
it draws up new rules for the $650 trillion derivatives markets
as part of the 2010 Dodd-Frank law, which lawmakers crafted in
response to the 2007-09 U.S. financial crisis.
"I did not always agree with the direction of the agency,"
Sommers said on Thursday in a letter to CFTC Chairman Gary
Gensler, a former Goldman Sachs banker.
The CFTC's powers were vastly expanded when the Dodd-Frank
law put it in charge of so far unregulated swaps, dominated by
Wall Street's big investment banks, such as JPMorgan Chase & Co
and Bank of America.
Before that, the commission's oversight was limited to
futures markets, and it was not perceived as a particularly
powerful agent in financial markets.
It is still governed by the agriculture committees in the
Together with the Securities and Exchange Commission, the
CFTC is drawing up dozens of rules to implement the Dodd-Frank
law, while facing intense lobbying from the industry, which has
also sued the agency on a number of occasions.
Sommers often has published dissenting statements on the
commission's decisions, most recently on a stop-gap measure to
determine how its rules apply abroad - a thorny issue that has
invoked the wrath of European and Asian regulators.
"The timing is right for me personally to leave the agency.
I have been here for over five years and feel like I have
accomplished a great deal," Sommers told Reuters in a statement.
She also said she had not yet decided what to do next.
Sommers' first term at the CFTC ran from 2007-09 and she
began a five-year term on Oct. 8, 2009. Her resignation will be
effective at the end of the first quarter, she said.
The commission's decisions are voted on by its five
commissioners, no more than three of whom may be from the same
political party at any time.
Three out of four commissioners, including Gensler, will be
Democrats once Sommers leaves. If her post is not filled
quickly, the CFTC will still be able to make decisions, though
the industry may regret the departure.
Representative Frank Lucas, an Oklahoma Republican who is
the chairman of the House of Representatives' committee that
oversees the CFTC - the Committee on Agriculture - said Sommers
had "advocated for a balanced approach to regulatory reform."
Before joining the CFTC, Sommers worked as the head of
government affairs for the International Swaps and Derivatives
Association (ISDA), a Wall Street lobby. She also worked at the
Chicago Mercantile Exchange.
The CFTC is expected to decide in the coming weeks on a set
of rules for so-called Swap Execution Facilities (SEFs),
exchange-like platforms that will be used to trade swaps, which
were so far traded largely over the phone.
It is one of the last big remaining tasks the CFTC needs to
finish before most of its rules come into force.