MINUTES OF THE FEBRUARY 13, 2023 MEETING OF THE 

U.S. COMMODITY FUTURES TRADING COMMISSION’S 

GLOBAL MARKETS ADVISORY COMMITTEE 

The Global Markets Advisory Committee (“GMAC”) convened for a public meeting on 

Monday, February 13, 2023, at 9:31 a.m., at the U.S. Commodity Futures Trading Commission’s 

(“CFTC” or “Commission”) Headquarters Conference Center, located at Three Lafayette Centre, 

1155 21st Street, N.W., Washington, D.C. The meeting consisted of three panels. Panel I 

provided an overview of the current state of global market structure and access to markets 

including trading, liquidity, clearing, and trade reporting. Panel II provided an overview of 

volatility in the global commodity markets including market fundamentals, end-users, and 

market disruptions. Panel III provided an overview of the state of the digital assets markets 

including international policy and regulation, and how these assets are being used. 

GMAC Members in Attendance 

Chris Allen, General Counsel for Banking and Markets, and General Counsel of HSBC Bank 

plc, HSBC 

Bill Bolton, Chief Financial Officer, Refining, Products, and Low Carbon Americas Trading and 

Shipping, bp 

Perianne Boring, Chief Executive Officer, Chamber of Digital Commerce 

Darcy Bradbury, Vice Chair, GMAC, and Managing Director and Head of Public Policy, D.E. 

Shaw & Co. 

Isaac Chang, Head of Central Execution, Global Fixed Income, Citadel 

Chris Childs, Head of Repository and Derivatives Services, Chief Executive Officer, and 

President, DTCC Deriv/SERV 

Jason Chlipala, Chief Operating Officer, Stellar Development Foundation 

Gerald Corcoran, Chief Executive Officer and Chairman of the Board, R.J. O’Brien & 

Associates 

Adam Farkas, Chief Executive Officer, Global Financial Markets Association and Association, 

and Chief Executive Officer, Association of Financial Markets Europe 

Scott Fitzpatrick, Chief Executive Officer, TraditionSEF 

Amy Hong, Head of Market Structure and Strategic Partnerships, Global Banking and Markets, 

Goldman Sachs 

John W. Horkan, LSEG Post Trade and LCH Group Chief Operating Officer and LCH Head of 

the Americas, LSEG 

Angie Karna, Managing Director and Head of Legal for Global Markets, Americas, Nomura 

Steven Kennedy, Global Head of Public Policy, ISDA 

Agnes Koh, Chief Risk Officer SGX Group 

Mary-Catherine Lader, Chief Operating Officer, Uniswap Labs 

Ben Macdonald, Global Head of Enterprise Products and President of Bloomberg SEF LLC, 

Bloomberg LP 

Jacqueline Mesa, Chief Operating Officer and Senior Vice President, Global Policy, FIA 

Erik Tim Müller, Chief Executive Officer, Eurex Clearing AG 

John Murphy, Global Head of Futures Division, Mizuho Americas 

Joseph Nicosia, Global Trading Operations Officer and Head of Global Cotton Platform, Louis 

Dreyfus 

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Dave Olsen, President and Chief Investment Officer, Jump Trading Group, FIA PTG 

Tetsuo Otashiro, Senior Head of Global Policy and Regulation, Japan Securities Clearing 

Corporation 

Christopher R. Perkins, President, CoinFund 

Thomas Pluta, President, Tradeweb 

Sachiyo Sakemi, Global Head of Legal for Global Markets Group, BlackRock 

Andrew Smith, Senior Vice President, Global Business Development and Market Structure, 

Virtu Financial 

Brad Tully, Global Co-Head of Corporate Derivatives and Private Side Marketing, J.P. Morgan 

Thane Twiggs, Chief Compliance Officer Cargill Risk Management 

Jason Vitale, Global Head of Foreign Exchange, Fixed Income & Equities, BNY Mellon 

Stuart Williams, Chief Operating Officer, ICE 

Julie Winkler, Chief Commercial Officer, CME Group 

Tom Wipf, Chairman, GMAC and Vice Chairman, Morgan Stanley 

Vadim Zlotnikov, Head of Fidelity Institutional, Fidelity Investments 

Chris Zuehlke, Partner and Global Head of Cumberland, DRW 

CFTC Commissioners and Staff in Attendance 

Rostin Behnam, Chairman 

Christy Goldsmith Romero, Commissioner 

Kristin N. Johnson, Commissioner 

Summer K. Mersinger, Commissioner 

Caroline D. Pham, Commissioner and GMAC Sponsor 

Gates S. Hurand, Chief Counsel, Commissioner Caroline D. Pham, GMAC Designated Federal 

Officer (“DFO”) 

Invited Speakers in Attendance 

Paulina Dejmek-Hack, Director for General Affairs, Directorate-General for Financial Stability 

 Financial Services, and Capital Market Union, European Commission 

Michael Demissie, Head of Advanced Solutions, BNY Mellon 

The Honorable Joshua Frost, Assistant Secretary for Financial Markets, U.S. Department of the 

Treasury 

Mike Golding, Transatlantic Chief Operating Officer, Optiver 

Derek Kleinbauer, Global head of Fixed Income & Equity e-Trading, Bloomberg and President, 

Bloomberg SEF LLC 

I. Opening Remarks 

Mr. Hurand called the meeting to order and turned the meeting over to Mr. Wipf, the 

GMAC Chair. Mr. Wipf welcomed the speakers, Commissioners, and Commissioner Pham as 

the sponsor of the GMAC. He introduced Commissioner Pham and noted that this was the first 

meeting under her leadership. 

Commissioner Pham mentioned that 2022 marked the 50th anniversary of the Federal 

Advisory Committee Act, which recognizes the benefits of seeking expert advice and 

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recommendations from the public. She emphasized that the GMAC was an international effort 

and welcomed all who travelled to participate and those that helped organize the meeting. 

Commissioner Pham then recognized Mr. Wipf and Ms. Bradbury for serving as the 

Chair and Vice Chair of the GMAC, and gave an overview of her goals for the panels. For Panel 

I, “Global Market Structure and Access to Markets,” she hoped for GMAC members to get a 

better understanding of the inherent trade-offs in policy decisions related to global market 

structure and access to markets across trading, liquidity, clearing, and trade reporting. For Panel 

II, “Global Commodity Markets Volatility,” she wanted GMAC members to understand recent 

events to be learned and to address global commodity markets volatility, including current 

challenges in the real economy and the impact on prices, and market disruptions in physical 

commodities markets and policy responses. 

For Panel III, “Digital Asset Markets,” she hoped to for GMAC members learn about 

digital assets, their use cases, and international policy developments to understand what is 

happening to ensure America remains competitive. 

Overall, Commissioner Pham stated that the meeting would help identify the priorities of 

the GMAC over the next two years. She noted that the GMAC would also vote on the 

establishment of three subcommittees (global market structure, digital asset markets, and 

technical issues). 

Commissioner Johnson then thanked the organizers and attendees. She stated that she 

had lengthy thoughts about macroeconomic indicators and volatility, but would rather yield her 

time to the experts in the room. She stated she was looking forward to being informed by their 

expertise so that the GMAC can develop and implement pragmatic solutions to support market 

integrity and market stability in the commodity derivatives markets both at home and abroad. 

Next, Commissioner Goldsmith Romero thanked Commissioner Pham, the organizers, 

and attendees. She highlighted the need to learn from the unexpected global challenges and 

market disruptions the markets have faced. In one example, she suggested considering whether 

bumper guards should be in place to help the markets remain resilient through disruptive events. 

In another example, she emphasized the importance of surveillance of abusive trading so that bad 

actors do not take advantage during times of stress. Finally, she stated that once we know what 

to expect regarding cybercrime and climate change, we can plan and manage the risks better. 

Commissioner Mersinger then thanked Commissioner Pham, the organizers, and 

attendees. She emphasized the need to continue the work that the GMAC started during 

Commissioner Stump’s tenure including implementing the uncleared swap margin rules. She 

also emphasized the need to learn from experts to determine the GMAC’s future direction. 

Finally, Chairman Behnam thanked Commissioner Pham, the organizers, and attendees. 

He emphasized that he was looking forward to supporting the Committee and being part of the 

discussions to come. 

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Mr. Wipf then introduced Assistant Secretary Frost, who began by giving some updates 

from the Office of Financial Markets, which is focusing on making the Treasury market more 

resilient, ensuring a smooth transition away from Libor, and charting a path forward for digital 

assets and voluntary carbon markets. He stated that this work has been coordinated through 

interagency working groups and Treasury market surveillance. 

Ms. Hack then gave her opening remarks. She highlighted the work going on in the 

European Union, including international agreements such as the implementation of the Basel III 

agreement, capital markets legislation, and new policies on sustainable finance, digital assets, 

and operational resilience. She concluded by stating that it is key to have global discussions and 

make sure different jurisdictions are in alignment on all of these issues. 

II. Panel I: Global Market Structure and Access to Markets 

Mr. Wipf introduced the first panelist, Mr. Kleinbauer, who provided his perspectives on 

recent trends in the adoption of electronic trading (e-trading). He gave an overview of data 

indicating that electronic trading has been increasing in recent years. He suggested electronic 

trading could be further maximized by modifying or introducing new regulatory requirements to 

certain products (e.g., the SEC should harmonize its security-based SEF rule with the CFTC, 

proposals by the SEC to change the definitions of “exchange” and “dealer” should be mindful of 

execution methods, etc.). 

Mr. Wipf introduced the next group of panelists focused on discussing trading and 

liquidity. 

Mr. Tully began by discussing the key drivers of liquidity in the Treasury market. Last 

year was a challenging year for Treasury liquidity; the lower liquidity was as a result of two 

trends: (1) uncertainty regarding inflation and interest rates caused lower Treasury liquidity; and 

(2) longer-term structural changes to the Treasury markets have resulted in less intermediation 

capacity (automated trading and regulatory and behavioral changes) and more sensitivity of 

market liquidity and volatility. Mr. Tully stressed that it was critical to understand how future 

policy decisions might impact liquidity. 

Ms. Sakemi then discussed the liquidity challenges traders are facing across assets classes 

in different regions. She attributed this change to recent changes in market volatility, which has 

resulted in dealers that are less likely to warehouse risk and traders with higher costs. She 

suggested regulators take steps to alleviate some of this market stress through better calibration 

and transparency of CCP margin practices, considering the cumulative impact of bank capital 

requirements on their market-making capacity, and expansion of eligible collateral for margin. 

Mr. Zlotnikov then discussed two topics critical to the global risk marketplace: (1) the 

growing course of proposed and potential reforms that could impact the U.S. Treasury market, 

and (2) the FSB and IOSCO focus on enhancing liquidity in the government debt and corporate 

debt markets. With regard to increasing Treasury market transparency, he suggested regulators 

consider principles-based ways to increase central clearing of repo agreements backed by 

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Treasury securities. He urged regulators to strongly consider costs in new policies and to allow 

for flexibility as well. With regard to the bond markets, while he recommended that pre-trade 

transparency should be studied further, he applauded TRACE (the Trade Reporting and 

Compliance Engine) for being successful in the United States and for providing much needed 

post-trade transparency. He stressed the importance of calibrating regulatory changes very 

carefully to avoid unintended economic consequences. 

Mr. Chang further discussed preserving and promoting liquidity and resiliency in the 

global interest rate ecosystem. He stated that a number of proposed enhancements to the 

regulatory framework and market structure could strengthen liquidity and resiliency. These 

include the central clearing of treasuries with a broad section of market participants having 

access; developing an appropriate client clearing solution; the SEC’s ultimate definition of the 

term “dealer”; increased transparency; and the preservation of international agreements regarding 

clearing and trading obligations in the swaps market. 

Mr. Fitzpatrick discussed market intermediation from the SEF perspective, stating there 

were three phases for SEFs: pre-trade, management, and communication. He highlighted the 

inconsistencies of the CFTC rules for SEF and stated that some were misplaced. For example, 

the inefficiency of handling market liquidity and the processing of orders is a stress point with 

his clients. Entities still have to explain to clients that they have to rely on several no-action 

relief letters and verbal agreements with CFTC staff to operate. These inconsistencies put SEFs 

and their clients at risk of breach and/or noncompliance with the rules. Mr. Fitzpatrick urged the 

CFTC to give SEFs the chance to resolve these issues and stated many of the issues were noncontroversial operational procedures. 

Mr. Wipf introduced the next group of panelists focused on discussing clearing. 

Mr. Corcoran stated that he would like to talk about the impact of the maintenance 

margin requirement as it drives the capital requirements for FCMs. If the maintenance margin 

requirement is too high, it reduces the return on capital to FCMs; if it is too low, the markets may 

not be as well protected. He suggested the GMAC consider whether there should be a more 

surgical approach to margin requirements, instead of a one-size-fits-all. 

Ms. Koh discussed the impact of regulatory capital changes over the past decade on 

commodities clearing. She noted that the change in regulatory capital requirements in the past 

decade has decreased the risk appetite of bank-related clearing members. The stringent capital 

requirements of Basel 3 have limited these clearing members commodity derivatives business to 

only client clearing. These clearing members have exited clearing of proprietary positions. She 

suggested that the GMAC review regulatory capital market requirements to see if there are any 

unintended consequences. 

Mr. Otashiro presented on U.S. customer access to a non-U.S. exempt DCO. He stated 

that some customers may want to access a non-U.S. exempt DCO as it might have higher 

liquidity, improve price efficiency, mitigate the negative effect of fragmentation, allow for better 

cross-margining, and provide access to products that are only available on such DCOs. To 

increase U.S. customer access, they would like to propose changes to the Commission’s Part 30 

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regime that sets the treatment of customer funds by FCMs. Proposed changes would include 

adding some safeguards, such as allowing customer clearing through U.S. FCMs or a foreign 

clearing broker, bankruptcy risk disclosure, measures to mitigate systemic risk flowing back 

from non-U.S. markets, and a comparability analysis on non-U.S. DCOs risk management. 

Mr. Müller discussed trends in the European cleared repo market. He stated that he 

expected that the market share that is cleared will further increase for three reasons: (1) 

technology and the emergence of electronic trading platforms, (2) bank balance sheets are 

constrained and the cleared repo market share is increasing, and (3) the cleared repo market may 

be a helpful tool to mitigate the liquidity risk management that the buy side is facing. He then 

discussed the benefits of the cleared repo market and the need to work together to come up with 

ways the buy side can find better access to the cleared repo market. 

Mr. Horkan began by stating that the GMAC should always think of equal market access 

as its guide. Equal market access leads to well-functioning markets by reducing market 

fragmentation and reducing barriers. He then discussed deposit access to central bank accounts 

by central counterparties. The ability to deposit client margin at a Federal Reserve Bank is an 

important systemic risk mitigation tool, especially in times of market stress. 

Mr. Wipf introduced the next group of panelists focused on discussing trade reporting. 

Mr. Childs provided a historical summary from 2008 to the present regarding trade 

reporting. He highlighted that data quality has improved within each jurisdiction. However, he 

also emphasized that there is more work to be done be able to amalgamate data from multiple 

repositories and jurisdictions for the purpose of systemic risk oversight. He emphasized that 

regulators must establish frameworks and governance structures that will allow data 

amalgamation. 

Mr. Kennedy discussed issues related to trade reporting. He stated that in the U.S. every 

time a member or reporting entity reports a derivatives trade, it is required to fill out 128 fields 

(and in the E.U., 170 data fields) by analyzing, interpreting, building, populating, and validating 

the information that it provides in each of those data fields. This process is prone to 

inconsistency and all the data gathered may not be able to be used. He suggested a better method 

for trade reporting, the digital regulatory reporting initiative, which uses crowdsourcing and 

digitization to increase data quality, consistency, and regulatory transparency. 

Mr. Wipf asked Mr. Pluta and Ms. Hong to provide their perspectives on Panel I. Mr. 

Pluta noted the discussion of challenges in trading and liquidity conditions and the decline of the 

role of banks as intermediaries, and the potential of innovation, algorithmic trading, and block 

trades to potentially address market challenges. Ms. Hong recognized Commissioner Pham for 

organizing the GMAC and highlighted the interlinked and global nature of markets and the 

importance of dialog such as the GMAC. Ms. Hong also discussed the CFTC’s block regime 

and the importance of flexibility. 

[Break] 

III. Panel II: Global Commodity Markets Volatility 

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Ms. Bradbury began by introducing the first speaker, Ms. Winkler, who gave an update 

on the state of the commodities market. She stated that the commodities markets just went 

through a super cycle with high commodity prices caused by supply and demand issues created 

by the pandemic and a major land war. She stated that she predicted prices would now 

normalize and discussed her analysis in the context of wheat and energy prices. She gave an 

overview of risks they are continuing to monitor including Chinese growth, Russian oil 

production, and volatile weather conditions. 

Ms. Bradbury introduced the next group of panelists focused on discussing market 

fundamentals and end-users with perspectives on key issues from producers and merchants. 

Mr. Bolton stated that the scale of the supply disruption over the last year associated with 

the loss of just a fraction of the world’s fossil fuels has highlighted the need to transition away 

from hydrocarbons to avoid energy shortages and higher prices. The disruptions of the last year 

have also highlighted the need to address energy security and affordability and the need to 

promote low carbon energy. 

Mr. Nicosia gave an overview of supply chain disruptions over the last few years. He 

examined in detail the various disruptions to transportation including ocean and international 

freight and domestic freight. 

Mr. Twiggs discussed the global report on food crisis and how two hundred five million 

people are expected to face acute food insecurity as a result of the state of the financial markets. 

He emphasized the need to examine how these people can be helped. 

Ms. Bradbury introduced the next group of panelists focused on reactions to recent 

market disruptions from financial market infrastructures and market participants. 

Mr. Williams discussed the various market disruptions of the last few years. First, he 

stated that legislators should be careful in what they legislate so as to avoid negative 

consequences. Second, he stated the GMAC should think about where these globally 

interconnected markets risk being fragmented to ensure that the global regulatory system is as 

coherent as possible across different jurisdictions. Third, he suggested that the GMAC carefully 

consider the role of the public sector in the transition away from a hydrocarbon intensive 

economy. 

Mr. Murphy discussed how the combination of the energy trade along with the nickel 

trade has pushed volatility to levels that were unsustainable. He suggested it was important to 

look into ways in which to curb this volatility. 

Ms. Mesa discussed the volatility following the Russian invasion of Ukraine. 

Specifically, she stated that many commodities went up in price, especially metals. She further 

noted that trading volume has still not come back and that there is a loss of confidence. She 

highlighted items that can be examined in anticipation of such market events such as reviewing 

large positions, position and accountability limits, rehearse default management, and volatility 

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controls. She highlighted that better volatility controls were needed across the industry and that 

different products would need different controls. 

Mr. Golding provided guidance on price controls, such as price limit and circuit breakers, 

and their impact on volatility. First, he stated when there is a malfunction, they want to make 

sure it does not have ripple effects throughout the market and disorderly trading is minimized. 

Second, when there is a legitimate extreme price movement, they want to make sure the market 

can maximize liquidity and that it does not malfunction. Third, they want to minimize unneeded 

liquidations. 

Following Mr. Golding’s presentation, Ms. Bradbury moved to the next agenda item 

concerning the creation of two new subcommittees, the Global Market Structure Subcommittee 

and Technical Issues Subcommittee. She asked for motions, which were made and seconded, to 

establish both subcommittees. She then called for votes on the motions and both motions to 

establish the subcommittees were adopted. 

[Lunch] 

IV. Panel III: Digital Asset Markets 

Following the lunch break, Mr. Wipf introduced the next panelist, Mr. Zuehlke, who gave 

an overview on the state of digital asset markets. He highlighted several trends in the digital 

asset markets that have emerged since the events of 2022. First, several leading crypto 

organizations filed for bankruptcy. As a result, market participants and regulators have been 

focusing on risk management by focusing on separating custody of funds, mitigating conflicts of 

interest, increased adoption of traditional finance best practices, and focusing on using fiatbacked stablecoins as a payment mechanism. Then he discussed the markets evolving structure 

and liquidity landscape. In the post-2022 world there are lower amounts of lending, lower 

valuations by venture capitalists, and increasing amounts of liquidity moving offshore. One of 

the most interesting developments is the industry is moving away from exchanges and more 

directly to OTC marketplaces. He also discussed a recent innovation called DeFi (decentralized 

finance). In closing, he highlighted that the innovation and regulation are not mutually exclusive 

concepts. For example, one of the most fascinating elements of DeFi is its potential ability to 

rapidly evolve to an ever-improving state. 

Mr. Wipf introduced the next panelist focused on discussing international policy and 

regulation. 

Mr. Farkas began by highlighting how regulators and standard setters have started 

numerous initiatives to try to tackle the issue of how regulators should react to all of the 

innovation related to and development of digital assets. One of the main ways to further this 

work is to further develop the classification of digital assets and coordinate globally so that these 

assets may be appropriately regulated. He emphasized the need for close coordination between 

regulators and industry. He also stated that there must be taxonomy that is developed for 

classification of digital assets based on key attributes so that the right regulatory approach could 

be applied. 

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Mr. Wipf introduced the final group of panelists focused on use cases. 

Mr. Demissie spoke next, stating that he believed the digital asset space is in a defining 

period. He emphasized the need for proper regulations to avoid the mistakes seen in other 

markets. He stated that the innovation underlying these assets is going to revolutionize finance 

because it solves problems clients care for by expanding the access, liquidity, and mobility of 

assets. He emphasized that it would be a big mistake to treat all digital assets the same from a 

regulatory perspective just because they share underlying technology. 

Mr. Chlipala spoke next discussing the use case of Stellar Aid Assist, the first of its kind 

aid disbursement system that enables the delivery of urgently needed cash assistance to 

vulnerable populations. This system is currently being piloted in Ukraine. The system is great 

because it allows cash to move quickly and allows the aid organization to trace each step of the 

transaction and minimizes the potential for fraud. 

Mr. Perkins discussed some non-financial use cases. First, he discussed nonfungible 

tokens and how they include not only profile pictures but also provide opportunities for creators 

to create, tokenize, and monetize art, music, and videos. Second, he discussed gaming and how 

earned in-game assets can be financialized to enable new studio and player business-oriented 

modes. Third, he discussed decentralized autonomous organizations and how they allow tokenenabled democratic governance mechanisms to be form communities that are not controlled by 

individuals or central authorities. Fourth, data sovereignty allows users to monetize their own 

data. Fifth, artificial intelligence can introduce open source development, community 

ownership, governance, and universal access that creates new models and efficiencies. Sixth, 

this new technology can be used to better the environment since the immutability of blockchain 

technology unlocks new ways to identify carbon credits. 

Ms. Lader spoke next and discussed the opportunities of block-chain and open system 

based decentralized exchange using these protocols. First, the blockchain combination of data 

storage with money movement lowers cost by removing friction and operational overhead and 

allows for nearly instant settlement. Second, open systems improve liquidity, transparency, 

security, and sharing allowing systems to become interoperable. 

Finally, Mr. Wipf introduced Ms. Boring to kick off a membership discussion. She 

discussed how the lack of regulatory clarity around digital assets impacts the industry and how it 

is absolutely critical to have a regulatory structure that works. Multiple regulators attempting to 

regulate has created an unclear and inconsistent regulatory environment and business is going to 

other jurisdictions as a result. 

Mr. Wipf opened the floor to questions and comments from the GMAC membership. 

Generally, the concerns and discussions raised in this session included: members of the buy side 

are straddling to find ways to hedge their risk, the importance of creating a taxonomy that 

classifies digital assets, how well-calibrated regulation can facilitate innovation, and looking at 

self-regulation as a means to regulate. 

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Mr. Wipf then moved to the next agenda item concerning the establishment of the 

GMAC Digital Asset Markets Subcommittee. He asked for a motion, which was made and 

seconded, to establish the subcommittee. He then called for a vote on the motion, and the motion 

to establish the subcommittee was adopted. 

V. Closing Remarks 

In closing, Commissioner Pham thanked all for the excellent discussions and stated she 

was looking forward to future discussions. 

Mr. Hurand adjourned the meeting at 2:58 p.m. 

___________________________________ ___________________ 

Darcy Bradbury 

Vice-Chair, GMAC 

Date 

7/6/2023

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