Commodity Futures Trading Commission 

Office of External Affairs 

Three Lafayette Centre 

 1155 21st Street, NW 

Washington, DC 20581 

 202.418.5080 

Statement 

Statement of CFTC Acting Chairman Walt Lukken 

Regarding Department of Treasury’s Blueprint for 

Modernizing the Financial Regulatory Structure 

March 31, 2008 

Washington, DC – Today, the U.S. Department of Treasury released a regulatory 

blueprint that includes recommendations to improve the U.S. financial regulatory 

structure with the goal of enhancing U.S. competitiveness in the global marketplace. 

Some of the proposals include recommendations related to combining the Commodity 

Futures Trading Commission (CFTC) and the Securities and Exchange Commission 

(SEC). CFTC Acting Chairman Walt Lukken made the following statement in response 

to the blueprint: 

“It is essential to examine ways to enhance the competitiveness of U.S. financial 

markets and seek improvements to the regulatory structure. Policymakers all strive for 

good government solutions that protect the public, reduce duplication and enhance 

competition and innovation. While I am still studying the Blueprint’s many 

recommendations, I applaud Secretary Paulson and the Treasury Department for their 

work on this critical undertaking and for recognizing the CFTC model of regulation as an 

advantageous one.” 

“The CFTC utilizes a flexible and risk-tailored approach to regulation aimed at ensuring 

consumer protection and market stability while encouraging innovation and competition. 

Congress gave the CFTC these powers with the passage of the Commodity Futures 

Modernization Act (CFMA) in 2000, which shifted the CFTC’s oversight from a rulesbased approach to one founded on principles. This prudential style is complemented by 

strong enforcement against market abuse and manipulation as evidenced by the $1 

billion worth of penalties assessed by the CFTC since the CFMA. The regulatory 

balance fostered by the CFMA has enabled the futures industry to thrive and gain 

market share on its global competitors with volumes on the U.S. futures exchanges 

increasing over 500 percent since 2000. During recent economic stress, these riskmanagement markets have performed well in discovering prices and providing 

necessary liquidity.” 
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“Although the creation of a new unified regulator for securities and futures could bring 

efficiencies, the tradeoffs of such a significant undertaking should be weighed carefully 

given these turbulent economic times and the competitive global advantage currently 

enjoyed by the U.S. futures industry. The CFTC is a world-class regulator because of 

its focused mission, market expertise, manageable size, problem solving culture and 

global outlook—all of which may be jeopardized with the creation of a larger regulatory 

bureaucracy. Any regulatory reform effort must preserve the benefits of the CFTC’s 

principles-based model and recognize the distinct functions of the futures markets and 

mission of the CFTC.” 

“Many of the benefits of a unified regulator can be immediately gained through 

enhanced coordination and information sharing between agencies. In fact, the CFTC 

and SEC recently signed a cooperation agreement aimed at addressing cross-agency 

issues, including the approval of hybrid products that may have otherwise fallen 

between our jurisdictional divide. These sorts of agreements should be given time to 

bear fruit. As Treasury recognizes in its Blueprint, the laws that govern the securities 

markets should be modernized similar to the futures laws before unification is 

contemplated to improve its chances of success. Unless the securities laws are first 

rationalized with those governing the futures markets, a merger may ironically make the 

U.S. futures industry less competitive globally and run counter to the explicit goal of this 

important endeavor. I look forward to working with policymakers to ensure that these 

issues are properly debated and addressed.”