Shortly before breaking for the August recess, the US Senate voted to approve commissioners to both the Commodity Futures Trading Commission (CFTC) and the Federal Energy Regulatory Commission (FERC), providing both agencies with enough commissioners for a functioning quorum. Both the CFTC and FERC have been without a quorum for months, preventing the agencies from carrying out any but the most basic items of regulatory business. The loss of quorum was particularly damaging on the policy front, as neither agency could move forward on existing policy initiatives or push through any administration priorities.
The new CFTC commissioners are Chris Giancarlo (R), Brian Quintenz (R), and Rostin “Russ” Behnam (D). On the FERC side, the two new commissioners are Neil Chatterjee (R), who was recently a key energy advisor to Senate Majority Leader Mitch McConnell (R-Ky), and Robert Powelson (R), who had served as a state energy regulator in Pennsylvania. Additional nominations to both agencies remain with the Senate and are likely to be acted on in the coming months, bringing both agencies to full membership.
FERC has a significant backlog of cases that could take months to clear, as well as multiple rulemakings that never made it past the proposal stage prior to FERC’s loss of quorum. These include the controversial “Connected Entities” proposal to gather information on market-based rate sellers and others for analytics purposes that was significantly reworked last summer in Docket No. RM16-17, as well as rules for electric storage and distributed energy resource aggregation participation in organized markets that were proposed in Docket No. RM16-23. The US courts of appeals also have issued a string of remands to FERC that will require a response, including a remand of FERC’s process for calculating return on equity (ROE). A Republican-led Commission—the first in almost a decade—is also likely to have its own policy priorities.
With a quorum, the CFTC is now well-positioned to address some of the most anticipated issues confronting participants in the derivatives markets. Those issues include, for example, the CFTC's initiative to impose mandatory position limits following enactment of the Dodd-Frank Act, the CFTC's application of an intent standard in attempted manipulation cases in light of the Southern District of New York’s ruling in CFTC v. Wilson, and the extent to which the CFTC endorses the Division of Enforcement's continued recent practice of utilizing non-prosecution agreements against individuals.