Jul 02, 2015 | News

CFTC Asks Congress for Additional Funds

According to the head of the CFTC, Timothy Massad, they simply cannot afford routine inspections, including inspections of exchanges and other companies it regulates.  Massad told a Senate committee, “We don’t even get to many of the clearinghouses and exchanges once a year.  That is a big problem.”

The CFTC has come under scrutiny as of late amid allegations that a trader cheated on an exchange from 2009 to 2014, including the day of the 2010 Flash Crash that briefly erased almost $1 trillion from U.S. stock prices.  Massad pointed out to Congress that the CFTC is tasked with regulating the $700 trillion swaps market on a $250 million annual budget.

The President has asked Congress to increase the CFTC’s budget to by 29% to $322 million.  Timothy Massad said that increase will be used to improve its technology and hire more staff to inspect companies as well as investigate wrongdoing.

If Congress does pass the requested increase in funding, you can expect more frequent visits from regulators in the coming year.

We will keep you informed when and if such legislation is passed.