Statement on the Commission’s Approval of a Designated Contract Market’s Listing of a Key Performance Indicator Contract

Today, in response to a request for review and approval under Commission Regulation 40.3, the Commission voted to approve a designated contract market ("DCM") to list for trading a swap with settlement based on a key performance indicator (the "KPI Contract").

As described in the approval order, the KPI Contract is a cash-settled, binary outcome contract structured as a swap under the Commodity Exchange Act ("CEA"). It is listed and traded on a DCM and cleared through a registered derivatives clearing organization. The KPI Contract-and other similar contracts listed for trading by this and other DCMs- are fully subject to the protections afforded by the CEA and the Commission's regulations thereunder, including the DCM Core Principles.

As the order emphasizes, the order speaks solely to the listing and trading of the KPI Contract - and other KPI event contracts discussed in the Submission - structured to trade on a DCM in compliance with the CEA and the Commission's regulations. The order does not address what may be similar products with the same underlying KPIs structured in different ways. Today's approval order does not address - and does not foreclose - SEC jurisdiction over KPI contracts based on the same underlying KPIs as those contemplated in the approval order that are structured to fall under the SEC's jurisdiction. Indeed, our sister agency recognized as much in its own approval order issued earlier this month.

I join SEC Chairman Atkins in celebrating the end of decades-long jurisdictional "turf wars" between the CFTC and the SEC that have frustrated innovation and left a void of unrealized financial products in their wake. Today's approval order, along with the SEC's order, reflects a new spirit of harmonization, innovation, and market participant choice, removing unnecessary obstacles to the lawful introduction of novel financial instruments within our markets.

I also thank the Staff for their hard work and dedication in developing the approval order.