CFTC Cost-Benefit Analysis Improvement Act

To expand the scope of the matters required to be evaluated by the Commodity Futures Trading Commission in considering the costs and benefits of its proposed regulations and orders, and for other purposes. 1. Short title This Act may be cited as the CFTC Cost-Benefit Analysis Improvement Act 2. Consideration by the Commodity Futures Trading Commission of the costs and benefits of its regulations and orders (a) In general Section 2(a) of the Commodity Exchange Act ( 7 U.S.C. 2(a) (16) Office of the chief economist (A) Establishment There is established in the Commission the Office of the Chief Economist. (B) Head The Office of the Chief Economist shall be headed by the Chief Economist. (C) Functions The Chief Economist shall serve as economic advisor and perform such other functions and duties as the Chairman may prescribe. (D) Professional staff The Commission shall appoint such other economists as may be necessary to assist the Chief Economist in performing economic analysis, regulatory cost-benefit analysis, or research. . (b) Consideration of costs and benefits Section 15(a) of such Act ( 7 U.S.C. 19(a) (1) by striking paragraphs (1) and (2) and inserting the following: (1) In general Before promulgating a regulation under this Act or issuing an order (except as provided in paragraph (3)), the Commission, through the Office of the Chief Economist, shall assess and publish in the regulation or order the costs and benefits, both qualitative and quantitative, of the proposed regulation or order, and the proposed regulation or order shall state its statutory justification. (2) Considerations In making a reasoned determination of the costs and the benefits, the Commission shall evaluate— (A) considerations of protection of market participants and the public; (B) considerations of the efficiency, competitiveness, and financial integrity of futures and swaps markets; (C) considerations of the impact on market liquidity in the futures and swaps markets; (D) considerations of price discovery; (E) considerations of sound risk management practices; (F) available alternatives to direct regulation; (G) the degree and nature of the risks posed by various activities within the scope of its jurisdiction; (H) the costs of complying with the proposed regulation or order by all regulated entities, including a methodology for quantifying the costs (recognizing that some costs are difficult to quantify); (I) whether the proposed regulation or order is inconsistent, incompatible, or duplicative of other Federal regulations or orders; (J) the cost to the Commission of implementing the proposed regulation or order by the Commission staff, including a methodology for quantifying the costs; (K) whether, in choosing among alternative regulatory approaches, those approaches maximize net benefits (including potential economic and other benefits, distributive impacts, and equity); and (L) other public interest considerations. ; and (2) by adding at the end the following: (4) Judicial review Notwithstanding section 24(d), a court shall affirm a Commission assessment of costs and benefits under this subsection, unless the court finds the assessment to be an abuse of discretion. .

Summary: CFTC Cost-Benefit Analysis Improvement Act This bill generally revises the cost-benefit analysis requirements for the Commodity Futures Trading Commission (CFTC). It establishes in the CFTC the Office of the Chief Economist. The office must perform the cost-benefit analyses of proposed CFTC regulations and orders. Additionally, such cost-benefit analyses must consider, among other things, the impact of market liquidity on relevant markets, available alternatives to direct regulation, and the cost of compliance for all regulated entities. A court must affirm such cost-benefit analyses, unless it finds an abuse of discretion.