Jill E. Sommers, one of two Republican members of the U.S. Commodity Futures Trading Commission, plans to resign from the country’s top derivatives regulator after the first quarter of this year.
“I’ve come to this decision after thinking about it and internally struggling about it for months,” Sommers, who has been a CFTC commissioner for five years, said yesterday in a telephone interview. “This has not been an abrupt decision.”
The five-member CFTC has spent more than two years writing Dodd-Frank Act rules to bolster oversight of the $639 trillion swaps market and the futures industry after a shortfall in customer funds at failed brokerage MF Global Holdings Ltd. (MFGLQ) The agency is preparing to complete rules governing trading platforms after finishing rules for data reporting and reducing risk by having trades guaranteed at clearinghouses.
“I feel like we’re kind of at the end of the major rulemaking for Dodd-Frank,” said Sommers, 44. “My intention is not to leave until after this last group of rules. It’s not effective immediately. I suspect I’ll leave sometime after the first quarter.”
Sommers, who has been a commissioner since August 2007, was named the senior member overseeing the investigation into MF Global after CFTC Chairman Gary Gensler recused himself. Gensler and former MF Global Chief Executive Officer Jon S. Corzine worked together at Goldman Sachs Group Inc. (GS)
The CFTC, SEC and Justice Department have yet to file criminal or civil charges after MF Global left a $1.6 billion shortfall in customer funds when it filed for bankruptcy in October 2011. Sommers has been called to congressional hearings to testify on the agency’s response to the collapse.
“She has advocated for a balanced approach to regulatory reform in the U.S. that is reasonable, thoughtful, and not disruptive to global markets,” U.S. Representative Frank Lucas, the Oklahoma Republican who leads the House Agriculture Committee, said in a statement yesterday. “I appreciate her leadership in investigating the failure of MF Global and hope the commission will continue her efforts when she leaves.”
Bart Chilton, one of three Democrats on the commission and next in seniority to Sommers, would be expected to take over her responsibilities overseeing the response to MF Global.
Sommers was a lobbyist for CME Group Inc. (CME), owner of the world’s largest futures exchange, and the International Swaps and Derivatives Association Inc. before joining the CFTC.
She often expressed concern over the agency’s approach to completing Dodd-Frank rules, citing a lack of coordination with the SEC and overseas regulators.
“Jill fought for sensible, clear and coherent regulation and was precise in executing her enforcement duties,” Scott O’Malia, the CFTC’s other Republican commissioner, said in a statement yesterday.
Sommers said last year that the agency hadn’t adequately considered public comments on proposed rules and lacked analysis of regulatory costs and benefits.
“I do not believe that these rules have a chance of withstanding the test of time but instead believe that the commission will be consumed over the next few years using our valuable resources to rewrite the rules we knew or should have known would not work,” she said on March 5.
To contact the reporter on this story: Silla Brush in Washington at firstname.lastname@example.org