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QUICK TAKE: CFTC Chairman Talks Data Tech, Free Markets

Traders Magazine Online News, March 6, 2019

John D'Antona Jr.

Much like the equities exchanges before them, the U.S. Commodity Futures Trading Commission wants to get into the data business.

In particular, the data analysis business. Think Facebook or Google as CFTC Chairman J. Christopher Giancarlo said at a recent USDA Agricultural Forum event. He also said that "human traders will be going by the wayside" in an increasingly digital world.

"As we focus our regulatory energies to better understand the changing dynamics of our commodity derivatives markets, we cannot deny that much is changing, and changing rapidly," Giancarlo said in a dinner speech at the forum. “New emerging digital technologies are pulling our farmers and ranchers into a virtual future, often beyond comprehension, with a powerful, gravitational pull. They are entering this virtual world with worries about trade, commerce, costs, and competition. And, as regulators, we needed to listen, and continue to listen. The greater the pace of change, the greater must be our capacity to keep pace, understand and harness it."

Giancarlo reminded his audience that commodity derivatives help manage risk for agricultural producers.

According to the report, he also noted that U.S. commodity futures are actually a global product. Calling the American derivatives markets "the world's largest, most developed, and most influential," he also cautioned to watch out for China, which is opening its domestic futures markets to international participation.

"Society may choose to address such concerns as climate change, poverty or gender discrimination, but they are properly addressed through legislative and executive initiative," he said. "The job of regulators is to oversee trading markets that fairly value those concerns, not promote or institute them."

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