The heightened regulatory focus on risk continues: The Commodity Futures Trading Commission has establish a new Risk Management Advisory Committee to conduct public meetings and make reports and recommendations on risk-management issues involving or relevant to participants in the markets it regulates.
The CFTC will use the committee’s reports and recommendations in evaluating regulatory and legislative issues falling within the Commission’s statutory responsibilities, according to the Federal Register notice. The group won’t have any operational responsibilities.
“Recent economic developments have demonstrated the critical importance of risk management and the need for clearinghouses, firms, and other market participants to thoroughly and systematically assess their risk-management practices,” the notice states. "Recent developments have similarly reemphasized the need for the Commission to effectively and efficiently assess industry risk controls, determine their ongoing effectiveness, and tailor oversight of regulated entities based upon accurate risk assessments. In these circumstances, an advisory committee focused on risk management will significantly advance the Commission’s ability to carry out its mission.”
The committee also will serve as “a vehicle for informed discussion of emerging issues relating to risk management and for communication regarding such issues among the Commission, market participants, regulators, and other relevant persons.”
The CFTC plans to appoint representatives of a cross section of the groups and interests involved in or affected by the Commission’s actions relating to risk management.
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