FACACLASSIC

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CFTC - 2494 - Market Risk Advisory Committee - Agency Authority

GENERAL INFORMATION

Committee Name	Market Risk Advisory Committee	Agency Name	Commodity Futures Trading Commission
Fiscal Year	2025	Committee Number	2494
Original Establishment Date	6/2/2014	Committee Status	Chartered
Actual Termination Date		Committee URL	https://www.cftc.gov/About/AdvisoryCommittees/MRAC
Actual Merged Date		Presidential Appointments*	No
New Committee This FY	No	Max Number of Members*	37
Terminated This FY	No	Designated Fed Officer Position Title*	Senior Counsel to Commissioner Kristin N. Johnson
Merged This FY		Designated Federal Officer Prefix	Ms.
Current Charter Date	4/16/2024	Designated Federal Officer First Name*	Danielle
Date Of Renewal Charter	4/16/2026	Designated Federal Officer Middle Name
Projected Termination Date		Designated Federal Officer Last Name*	Abada
Exempt From Renewal*	No	Designated Federal Officer Suffix
Specific Termination Authority		Designated Federal Officer Phone*	646-746-3931
Establishment Authority*	Agency Authority	Designated Federal Officer Fax*
Specific Establishment Authority*	Commission Order	Designated Federal Officer Email*	dabada@cftc.gov
Effective Date Of Authority*	4/24/2014
Exempt From EO 13875 Discretionary Cmte	Not Applicable
Committee Type*	Continuing
Presidential*	No
Committee Function*	Non Scientific Program Advisory Board

RECOMMENDATION/JUSTIFICATIONS

Agency Recommendation*	Continue
Legislation to Terminate Required	Not Applicable
Legislation Status	Not Applicable
How does cmte accomplish its purpose?*	The MRAC accomplishes its purpose by submitting advise and recommendations to the Commission on: (1) systemic issues that impact the stability of the derivatives markets and other related financial markets; and (2) the impact and implications of the evolving market structure of the derivatives markets and other related financial markets. During this fiscal year, the MRAC held two meetings, on December 11, 2023, and April 9, 2024. At the December 11, 2023 meeting, the MRAC addressed: (1) CCP Risk and Governance—International Perspective, examining how international regulatory bodies have tackled the issue of central counterparty risk, including hearing from external speakers; (2) CCP Risk and Governance—Workstream reports, in which the subcommittee reported out on progress its workstreams had made toward developing recommendations regarding third-party risk, legal entity identifiers, recovery and resolution, and margin and collateral; (3) Market Structure—Workstream reports, in which the subcommittee reported out on progress its workstreams had made toward developing recommendations regarding futures commission merchant capacity, treasury market reform, the block implementation rule, and post-trade risk reduction; (4) Climate-Related Market Risk, a discussion of the rising issues with carbon credits and their derivatives, and potential next steps for the subcommittee; and (5) Future of Finance—a discussion of risks inherent to AI and the crypto industry and potential next steps for the subcommittee. At the April 9, 2024 meeting, the MRAC addressed: (1) CCP Risk and Governance—a presentation of a recommendation on derivatives clearing organizations' recovery and resilience policies and procedures, including a parent committee membership vote (which passed) on sending the recommendation to the Commission; (2) Future of Finance—a presentation of the workplan developed by the subcommittee, particularly focused on the risks and best practices of using artificial intelligence in financial markets; (3) Market Structure—a presentation of the subcommittee's report of its analysis of the structural issues related to futures commission merchant capacity in the market due to consolidation, including a parent committee membership vote (which passed) on sending the report to the Commission; (4) Climate-Related Market Risk—a roundtable discussion on carbon credits and derivatives, including a presentation from an external speaker from a non-profit working on-the-ground on developing carbon credit projects. The discussions at these MRAC meetings on critical market risk and market structure issues (i.e., the future of finance, climate-related market risk, CCP risk and governance, and market structure issues relevant to FCMs and non-intermediation) accomplished the MRAC’s purpose of assessing the impact and implications of developments in the structure of the derivatives markets, as well as systemic issues that impact the stability of the derivatives markets and other related financial markets.
How is membership balanced?*	The MRAC ensures its membership is balanced by appointing individuals who represent groups with an interest in the MRAC’s mission and function and reflect a wide range of perspectives and interests, including those that may be conflicting, related to the derivatives markets and other financial markets. Its membership may consist of the following types of viewpoint categories: (1) end-users; (2) exchanges; (3) swap execution facilities; (4) swap data repositories; (5) clearinghouses; (6) asset managers; (7) intermediaries; (8) market makers; (9) service providers; (10) academia; (11) public interest groups; (12) regulators; and (13) blockchain and cryptocurrency industry firms.
How frequent & relevant are cmte mtgs?*	The MRAC typically meets two or more times per calendar year. The subjects of market risk and the evolution of market structure are highly relevant to the work of the CFTC. In addition, addressing systemic risk is at the heart of the Commission’s mission. The Future of Finance and Climate-Related Market Risk subcommittees are focused on the risks in emerging areas of the CFTC's jurisdiction, which increasingly is grappling with AI, crypto, and climate.
Why advice can't be obtained elsewhere?*	Currently, the Commission does not have another manner in which to obtain regular feedback from the public, market participants, and registrants on market risk and systemic market issues that could impact the stability of derivatives and other markets. The MRAC helps the Commission understand how the public, market participants, and registrants are affected by structural changes in the derivatives and other financial markets. Accordingly, the MRAC assists the Commission with respect to developments in the structure of the derivatives markets and the effects that such changes may have on systemic issues that could impact the stability of derivatives and other financial markets.
Why close or partially close meetings?	N/A
Recommendation Remarks

PERFORMANCE MEASURES

Outcome Improvement To Health Or Safety*	No	Action Reorganize Priorities*	No
Outcome Trust In Government	Yes	Action Reallocate Resources	No
Outcome Major Policy Changes	No	Action Issued New Regulations	No
Outcome Advance In Scientific Research	No	Action Proposed Legislation	No
Outcome Effective Grant Making	No	Action Approved Grants Or Other Payments	No
Outcome Improved Service Delivery	No	Action Other	No
Outcome Increased Customer Satisfaction	No	Action Comment	N/A
Outcome Implement Laws/Reg Requirements	No	Grants Review*	No
Outcome Other	Yes	Number Of Grants Reviewed	0
Outcome Comment	The MRAC assists with assessing issues impacting clearinghouses, exchanges, swap execution facilities, swap data repositories, intermediaries, market makers, and end-users, and also contributes to pending rule rulemakings and policy considerations within the Commission.	Number Of Grants Recommended	0
Cost Savings*	Unable to Determine	Dollar Value Of Grants Recommended	$0.00
Cost Savings Comment	N/A	Grants Review Comment	N/A
Number Of Recommendations*	6	Access Contact Designated Fed. Officer*	No
Number Of Recommendations Comment	The MRAC voted on five proposals from the CCP Risk and Governance subcommittee and one from the Market Structure subcommittee. The recommendations made by MRAC coming out of the CCP Risk and Governance subcommittee related to central counterparty recovery and resolution. They included: 1. Recommendation to implement supervisory stress tests for DCOs 2. Require DCOs to determine recovery and wind-down scenarios and analyses 3. Support inclusion of NDLs in recovery and resolution planning for All DCOs 4. Support the provision of data to the CFTC for resolution planning 5. Set up an inter-agency task force to address challenges to porting of customer positions and collateral during recovery and wind down The MRAC also approved a recommendation from the Market Structure subcommittee regarding futures commission merchant capacity and the effects of industry consolidation, specifically that the CFTC should conduct additional analysis, and seek feedback from market participants.	Access Agency Website	Yes
% of Recs Fully Implemented*	0.00%	Access Committee Website	No
% of Recs Fully Implemented Comment	The reports and recommendations above were provided to the Commission for their consideration in Fiscal Year 2024 but MRAC has not yet received feedback from the Commission.	Access GSA FACA Website	Yes
% of Recs Partially Implemented*	0.00%	Access Publications	No
% of Recs Partially Implemented Comment	N/A	Access Other	No
Agency Feedback*	No	Access Comment	N/A
Agency Feedback Comment*	MRAC has not yet received agency feedback on its reports and recommendations.	Narrative Description*	The Commission's mission is to promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation. The MRAC supports this mission and the agency's strategic plan by assisting the Commission with identifying and understanding (1) systemic issues that impact the stability of the derivatives markets and other related financial markets; and (2) the impact and implications of the evolving market structure of the derivatives markets and other related financial markets, including emerging areas of climate derivatives, crypto, and AI.

COSTS

1. Payments to Non-Federal Members*		1. Est Paymnts to Non-Fed Membrs Nxt FY*
2. Payments to Federal Members*		2. Est. Payments to Fed Members Next FY*
3. Payments to Federal Staff*		3. Estimated Payments to Federal Staff*
4. Payments to Consultants*		4. Est. Payments to Consultants Next FY*
5. Travel Reimb. For Non-Federal Membrs*		5. Est Travel Reimb Non-Fed Membr nxtFY*
6. Travel Reimb. For Federal Members*		6. Est Travel Reimb For Fed Members*
7. Travel Reimb. For Federal Staff*		7. Est. Travel Reimb to Fed Staf Nxt FY*
8. Travel Reimb. For Consultants*		8. Est Travel Reimb to Consltnts Nxt FY*
10. Other Costs		10. Est. Other Costs Next FY*
11. Total Costs	$0.00	11. Est. Total Next FY*	$0.00
Date Cost Last Modified	2/19/2025 10:42 AM	Est. Fed Staff Support Next FY*
Federal Staff Support (FTE)*		Est Cost Remarks
Cost Remarks

Interest Areas

Category Area Finance Finance Legislation Regulations

Custom Links

Committee Level Reports