On May 17, 2017, Commodity Futures Trading Commission (“CFTC”) Acting Chairman J. Christopher Giancarlo announced an “important step forward” in bringing the CFTC’s regulations into the “digital world of the 21st century.”  The CFTC’s new FinTech initiative, LabCFTC, will facilitate cooperation between the CFTC and FinTech innovators.

Acting Chairman Giancarlo stated that the primary aims of the initiative are: (1) to provide greater regulatory certainty to the industry; and (2) to identify and utilize emerging technologies that can better enable the CFTC to regulate the commodities markets.  Given the breadth of the “commodity” definition, numerous potential FinTech initiatives, such as those related to clearing, digital currencies, transaction settlement, etc., may fall under CFTC jurisdiction.  Often the regulations are new and potentially costly and burdensome for FinTech startups, so any guidance and certainty from the CFTC should be very welcomed by the industry.

The initiative’s two core components are GuidePoint and CFTC 2.0. GuidePoint will provide a direct point of contact to FinTech innovators to engage with the CFTC, discuss compliance issues, and obtain guidance.  GuidePoint will have its own suite in the CFTC’s New York office.  Acting Chairman Giancarlo clarified that CFTC will not be entering the business of providing legal advice to market participants but it will help innovators better understand relevant regulations and the CFTC’s policies.  LabCFTC will not have its own independent decision making authority, but can offer some guidance to industry members.  The CFTC website will have a new portal that persons can use to reach out with such questions and concerns.  CFTC 2.0 is a FinTech/RegTech innovation lab that will better enable the CFTC to understand new financial technologies and identify useful applications.

In a speech announcing the initiative, Acting Chairman Giancarlo expressed his hope that “LabCFTC and its engagement with technology innovators will assist the CFTC in prioritizing efforts to modernize its regulatory mission.”

If you have any questions regarding LabCFTC or wish to contact the CFTC via GuidePoint, please contact Kari S. Larsen (klarsen@reedsmith.com) or Michael S. Selig (mselig@reedsmith.com).