REGULATION

CFTC looks to modernise with FinTech plan

CFTC looks to bring itself into 21st century with the launch of a major FinTech initiative.

By Hayley McDowell hayley.mcdowell@strategic-i.com May 18, 2017 9:28 AM GMT

The US Commodity Futures Trading Commission (CFTC) has confirmed its plans to launch LabCFTC to promote FinTech in futures and swaps markets.

LabCFTC will act as a platform to encourage fair competition in FinTech and as a source of information on new technologies for the derivatives watchdog.

It serves two purposes, to provide greater regulatory certainty that encourages market-enhancing FinTech innovation and to identify new technologies.

The initiative includes GuidePoint, a dedicated point of contact for FinTech firms to engage with the CFTC and learn about its regulatory framework.

Studies and research will also be produced to better inform market participants about responsible innovation in markets and to identify emerging FinTech and RegTech firms.

The initiative is set to bring the US derivatives regulator into the 21st Century, according to the acting Chairman at the CFTC.

Christopher Giancarlo explained in a keynote speech to the New York FinTech Innovation Lab: “The world is changing. Our parents’ financial markets are gone. The 21st century digital transformation is well underway.

“The digital technology genie won’t go back in the bottle. Nor should it. Yet, despite these 21st century innovations, the CFTC remains stuck in a 20th century time warp.”

He said the LabCFTC initiative will help bridge the gap between where the market is today and where it needs to be.

Sharon Bowen, commissioner at the CFTC, commended Giancarlo for launching LabCFTC and explained the futures and swaps markets are rooted in the last century, “we now oversee trading that occurs almost exclusively on screens where transactions happen faster than the blink of an eye.”