CFTC chief backs innovation in $1.2 quadrillion derivatives market

CFTC Chairman Michael Selig said regulators must give financial innovation room to lead as the global derivatives market enters a new phase of development. Summary Global derivatives contracts now have a combined notional value exceeding $1.2 quadrillion, according to Selig. The CFTC oversees markets representing nearly half of that total, giving it substantial global influence. Selig said the agency would support innovation while retaining safeguards against fraud, manipulation and market abuse. Prediction markets and crypto derivatives are becoming important tests of the CFTC’s regulatory approach. Selig rejects restrictive derivatives rules Writing in The Economist, Selig argued that regulators should avoid importing or copying rules that could limit competition and prevent new financial products from reaching the market. “The new era of finance needs innovation, not consensus,” Selig said. Derivatives, including futures, options and swaps, allow companies, farmers, investors and financial institutions to manage risk and allocate capital. Selig placed the global notional value of those contracts above $1.2 quadrillion, with markets under CFTC supervision accounting for nearly ha...