WASHINGTON, March 6 Three nominees to head the
U.S. derivatives regulator met little pushback in the Senate on
Thursday as the agency heads into quieter waters after the
departure of Gary Gensler, the former chief who was deemed
overly aggressive by big banks and other critics.
Timothy Massad, a corporate lawyer who also headed the $700
billion U.S. bank bailout program, has been nominated by
President Barack Obama to take the helm of the Commodity Futures
Massad and two other nominees must be confirmed by the
Senate if they are to join the five-member Commission.
Once a little-known agency that regulated agriculture
futures, the CFTC was given authority over the $630 trillion
global swaps market in 2010, a task Gensler took at hand
vigorously, angering banks in the process.
Most of the rule-writing is done, and Massad promised a more
modest agenda of enforcing the new rules, fine-tuning them if
needed, and cooperating to a greater extent with foreign
regulators, with whom the CFTC has argued in the past.
"We must aggressively pursue wrongdoers whatever their
position or size and we must deter and prevent unlawful
practices," Massad said at a hearing of the Senate Agriculture
Committee, which oversees the CFTC.
Sharon Bowen, a partner at law firm Latham & Watkins in New
York, and Chris Giancarlo, an industry veteran at swaps broker
GFI Group Inc, have also been nominated to the CFTC,
and were also questioned during the hearing.
Appearing for a group of lawmakers heavily backed by
agricultural interests, the nominees pledged to listen to
concerns from farmers and ranchers, the original users of the
futures markets the agency oversees.
Such groups have expressed concern that tight new rules
written to tame Wall Street will make using the financial
instruments prohibitively expensive.
Unusually, the Commission in its new set-up will no longer
have a dedicated agriculture expert member. But lobby groups for
the sector have said they can live with the three, as long as
they are granted some form of access.
Massad also said he would work closely with authorities
abroad, alluding to last year's public dispute with foreign
regulators. At issue was the degree to which the CFTC wants
non-U.S. banks to abide by its rules.
Giancarlo, a derivatives industry veteran from GFI and a
nominee to a Republican spot on the Commission, warned of an
overly hasty rule-writing process, a frequent complaint against
the CFTC by banks.
Bowen, a second Democratic nominee to the Commission, may
still face questions later in the process over the $7 billion
Allen Stanford Ponzi scheme, because of her role in a decision
that left investors out of pocket. Stanford is serving a
110-year prison sentence.
Bowen heads the Securities Investor Protection Corporation,
which is embroiled in a legal battle with the Securities and
Exchange Commission over SIPC's decision not to pay out to
people who had lost money in the scandal.
U.S. Senator Thad Cochran, the highest ranking Republican on
the Agriculture Committee, has publicly supported the SEC in its
fight against SIPC. While he mentioned the scandal during his
question, he did not pursue the issue.