With UK Preoccupied, CFTC Steps Up to Monitor Commodities
United States (US) regulators are concerned that the frenzy created by Brexit will absorb increasing attention from United Kingdom (UK) and European Union (EU) regulators, so much so that market oversight might suffer. On June 27, 2016, the Commodity Futures Trading Commission (CFTC) convened a meeting of the Market Risk Advisory Committee, during which Chairman Timothy Massad pointed to growing “volatility.” In response, the CFTC has ramped up monitoring and efforts to “work with exchanges and clearinghouses and other regulators and do all [it] can to ensure [that] markets function properly.”
The CFTC is particularly concerned with commodity price fluctuations and risk positions at clearinghouses. Massad said, “The UK authorities and the EU will be spending time figuring out the implications of this vote, and that may limit the time and energy they have for some other things.” One of the key UK officials monitoring this space, Jonathan Hill, the British EU Commission, announced his resignation over the weekend. CFTC Commissioner Sharon Bowen said the UK’s decision could have “long-lasting effects” on regulatory policy in the US, saying the CFTC will “need to make many decisions in light of this new reality.” A stronger US regulatory presence coupled with waning EU oversight could create unusual gaps and overlaps in global market supervision.
£1 GBP = $1.34 USD
€1 EUR = $1.11 USD
(as of 7:00 AM EST, 6/29/2016)
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US Secretary of State Casts Doubt on Brexit Process – Secretary of State John Kerry met with UK Prime Minister David Cameron, suggesting there may be ways the referendum could be “walked back.”
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