Senate Ag holds confirmation hearing on Selig

The Senate Agriculture Committee held a confirmation hearing today on Michael Selig, President Trump’s nominee to be chairman of the Commodity Futures Trading Commission. Selig pledged that he will maintain the CFTC’s traditional roles in regulating ag futures even while the agency is expected to take an expanded role in the regulation of cryptocurrencies and digital markets.

Selig said his commitment to the agriculture world is that “I will always be an open door to hear your issues.” Selig said he would oversee the CFTC Agriculture Advisory Committee, will make a tour around the country to meet with farmers and will have a dedicated agriculture adviser in his office. He also said he will revive the Kansas City CFTC conference.

A coalition of agriculture groups sent congressional leaders a letter of support for Selig.

“While Mr. Selig’s most recent focus has been primarily on the digital assets sector in his role as chief counsel for the Securities and Exchange Commission’s cryptocurrency task force and senior adviser (to) the SEC chairman, he is an experienced derivatives attorney and advised and represented clients in more traditional derivatives markets while in private practice,” the groups wrote.

Asked repeatedly by Democrats about whether the CFTC will need more staff and money as it regulates digital markets, Selig repeatedly said he would look into that issue when he is confirmed. Senate Agriculture Committee Chairman John Boozman, R-Ark., said he agrees with the Democrats that the agency will need more resources.

Sen. Cory Booker, D-N.J., author of a CFTC crypto bill with Boozman, noted that the Securities and Exchange Commission, where Selig now works, has 5,000 employees while the CFTC has only 600 employees.

“There is a real problem with capacity,” Booker told Selig, adding that he hopes Selig will be “bold” in asking for resources as the CFTC’s responsibilities increase.

Democrats also repeatedly noted that the CFTC at present has only a chairwoman and asked Selig if he would support the nomination of Democrats to the commission as the law provides. Selig said he would leave that decision up to the president but told Sen. Elissa Slotkin, D-Mich., he believes that “a diversity of opinion” is helpful.

Boozman said it is important for Senate Minority Leader Chuck Schumer, D-N.Y., to choose Democratic nominees for the CFTC. 

Selig told Sen. Amy Klobuchar, D-Minn., ranking member on the committee, that he is committed to supporting the whistleblower program at the CFTC. 

Selig repeatedly praised the committee for developing bipartisan legislation to give the CFTC the authority to regulate the spot digital commodity markets.

In his opening statement, Boozman said, “I want to repeat what I have said multiple times before this committee: The CFTC is the right agency to regulate spot digital commodity trading. The CFTC — and only the CFTC — should regulate the trading of digital commodities. This is because only the CFTC understands the unique characteristics of commodities and commodity-based contracts.

“While the CFTC has the right regulatory approach, expertise, and skill set to handle this new responsibility, it is up to Congress to grant the agency this new authority to regulate spot digital commodity trading.

“Failure by Congress to do so will leave U.S. consumers vulnerable to bad actors and will keep the U.S. behind the rest of the world. Though a regulatory framework for spot digital commodities has yet to be authorized by Congress, the markets and underlying technology are fast at work. Absent a comprehensive U.S. regulatory framework, bad actors will continue to go unchecked, and legitimate entities will be disincentivized from participating in U.S. markets. All the while, U.S. consumer participation will continue to grow, as will the risk faced by consumers.

“I want to thank Sen. Booker for his partnership on our bipartisan discussion draft, and I look forward to working with him and the rest of this committee to advance a bipartisan proposal out of this committee. The time to act is now, and I look forward to working with each of you towards advancing this goal.”

Former CFTC Chairman Christopher Giancarlo, who introduced Selig, noted that Selig had worked for him at the CFTC as a law clerk early in his career. In his opening statement, Selig said Giancarlo had “emphasized to me the importance of derivatives markets to all Americans. Our nation’s farmers, ranchers, energy producers, and commercial businesses rely on futures and swaps for price discovery and risk management. Robust markets for derivatives that enable hedgers to lock in prices help ensure that the cost of groceries, transportation, electronics, and all manner of goods and services do not fluctuate wildly for American consumers each day. If confirmed, I would welcome the vital responsibility to oversee the stability and security of these markets and protect consumers from fraud and manipulation.”