CFTC Vacancies Threaten Reform Momentum

Only two commissioners are expected to stay into 2014, leaving the CFTC evenly split on party lines and raising questions about whether it will be able to pass new rules.

The top U.S. derivatives regulator may dwindle to just two voting commissioners and struggle to approve new rules unless the White House and Senate can overcome political hurdles to fill the vacancies by the end of the year.

The Commodity Futures Trading Commission (CFTC), which is designed to have five members who regulate trading by banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co., could instead have only one Democrat and one Republican early next year. The split would probably delay votes on contentious Dodd-Frank Act regulations.

Their possible nominations and the pending nomination of J. Christopher Giancarlo, an executive at New York-based inter-dealer broker GFI Group Inc., to replace Sommers could face hurdles in the Senate, which has split along party lines. A three-month bipartisan truce over nominees broke down on Oct. 31 when Republicans opposed two of Obama’s candidates, including Representative Mel Watt to head the Federal Housing Finance Agency.

Action on any possible nominee could also slip into next year because the Senate is planning to be out of session from Nov. 22 to Dec. 9 and committees typically take several weeks to review nominees’ paperwork and to schedule confirmation hearings and votes. A single senator can also hold up a vote on a confirmation.

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