CFTC Commissioner Johnson Announces Agenda For March 8 Meeting Of The Market Risk Advisory Committee

CFTC Commissioner Kristin N. Johnson, sponsor of the Market Risk Advisory Committee (MRAC), today released the agenda for its public meeting on Wednesday, March 8 from 9:30 a.m. to 12:30 p.m. (EST) at the CFTC’s Washington, D.C. headquarters. Members of the public may also attend the meeting virtually. See the detailed agenda here. 

At the meeting, the MRAC will address current topics and developments in the areas of emerging technology-oriented risks affecting the derivatives and related financial markets, including recovery and resilience in the event of cyber-security incidents. The MRAC will also discuss central counterparty risk and governance, climate-related market risk, market structure developments and interest rate benchmark reform.

“The MRAC meeting will examine the many facets of risk and risk management that traditional market participants and new entrants to our markets must navigate. Persistent, pernicious, and pervasive cyber risks threaten critical infrastructure resources. Such resources include intermediaries that facilitate trade execution, including clearinghouses, exchanges, futures commission merchants, and the third party service providers who assist these firms. Increasing threats such as ransomware attacks require collective consideration of operational resilience, industry-wide communication, a major incident response plan, and protection of customer assets and information,” said Commissioner Johnson.

“A cyber-related incident in January of this year at ION Cleared Derivatives (a subsidiary of ION Markets), a third-party service provider of cleared derivatives order management, order execution, trading, and trade processing, had ripple effects across markets impacting many firms and their counterparties. This series of events underscores the potential threat that cyber-related incidents pose for financial market infrastructure” Commissioner Johnson noted.  The MRAC meeting will feature special presentations by Matthew Cronin, Director of the Office of the National Cyber Director; Tom W. Sexton, III, President and Chief Executive Officer, National Futures Association; Walt Lukken, President and Chief Executive Officer, Futures Industry Association; Chris Hayward, Chairman of Policy and Resources, City of London Corporation; and regulators from the U.S. Department of the Treasury, Federal Reserve, U.S. Securities and Exchange Commission, and the U.S. Department of Justice.

“We anticipate proposals and announcements regarding valuable, collaborative approaches to prevent or mitigate cyber risks across the diversity of firms operating in our markets. I expect the CFTC and our fellow regulators, alongside key partners who have real time access to data, information flows, and operational infrastructure, to take the lead in setting standards and monitoring systems to minimize the frequency and magnitude of cyber threats,” Commissioner Johnson continued.

According to Commissioner Johnson, “In addition to cyber threats, the MRAC will explore the remarkable, transformative growth and innovation in digital asset markets – both the promise and the peril. In the wake of a contagion marked by several cryptofirms experiencing liquidity crises, we anticipate moving beyond the commonly cited use cases and exploring DeFi, digital identity, interoperability and alternative uses and use cases for distributed digital ledger or blockchain technology. Looking past the hype-cycle, what is the value proposition of these technologies and what risks should TradFi, CeFi, and DeFi market participants and their customers consider and address?”

The MRAC will continue critical discussions and recommendations advanced by the Central Counterparty Risk and Governance and Interest, Market Structure and Interest Rate Benchmark Reform subcommittees. Finally, the Climate-Related Market Risk Subcommittee will offer a roundtable exploring voluntary carbon markets among other topics growing from the 2020 report Managing Climate Risk in the U.S. Financial System, the 2022 Voluntary Carbon Market Convening at the CFTC, and the responses to the follow-on Request For Information released in June of 2022.

The meeting agenda may change to accommodate other MRAC priorities. For agenda updates and more information about this advisory committee, including its members, please visit MRAC. 

Viewing/Listening Instructions: The meeting will be open to the public. Seating for the public may be limited due to the CDC's COVID-19 Community Level, which may require facilitating physical distancing to avoid overcrowding and additional restrictions. Members of the public may also access a live feed via streaming or phone. The live feed will be streamed on cftc.gov. Call-in participants should be prepared to provide their first name, last name, and affiliation, if applicable. People requiring special accommodations to attend the meeting because of a disability should contact Bruce Fekrat (bfekrat@cftc.gov) or Marilee Dahlman (mdahlman@cftc.gov). Materials presented at the meeting, if any, will be made available on cftc.gov.

Public Comments

Members of the public may submit comments in connection with the meeting, identified by “Market Risk Advisory Committee,” by March 15, 2023. Follow the instructions for submitting public comments through the Comments Online process on cftc.gov. If you are unable to submit comments online, contact Bruce Fekrat (bfekrat@cftc.gov) or Marilee Dahlman (mdahlman@cftc.gov), to discuss alternate means to submit comments. Statements submitted in connection with the committee meeting will be made available to the public, including publication on cftc.gov. The meeting agenda may change to accommodate other MRAC priorities. For agenda updates and more information about this advisory committee, including its members, visit MRAC.

There are five active Advisory Committees overseen by the CFTC. They were created to provide advice and recommendations to the Commission on a variety of regulatory and market issues that affect the integrity and competitiveness of U.S. markets. These committees facilitate communication between the Commission and market participants, other regulators, and academics. The views, opinions, and information expressed by the Advisory Committees are solely those of the respective Advisory Committee and do not necessarily reflect the views of the Commission, its staff, or the U.S. government.

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