Rostin Behnam, a Democratic commissioner who spearheaded efforts to study climate risks for financial markets, ascended to the role of acting chairman of the Commodity Futures Trading Commission by a unanimous vote of commissioners Jan. 21.
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Republican Heath Tarbert stepped down from his role as chairman earlier in the day but remains a commissioner at the CFTC, which oversees commodity derivatives markets.
In the near term, the commission retains a 3-2 Republican majority, although Tarbert is expected to leave sometime during the first half of the year.
At the CFTC, the permanent chairmanship requires a nomination from the president and Senate confirmation. President Joe Biden has not yet announced his choice, amid reports that Georgetown University professor Chris Brummer is a leading candidate. Former President Barak Obama previously nominated Brummer, but former President Donald Trump withdrew the nomination.
By CFTC tradition, members of the commission vote on an acting chairman, generally selecting a commissioner of the president's party with the most seniority. Behnam joined the commission prior to his Democratic colleague, Dan Berkovitz.
In a Jan. 21 statement, Behnam noted that as commissioner he "focused on ensuring our rules prioritize customer protections, examining potential systemic market risk, and gaining a better understanding of what regulators can do to address climate-related financial market risk."
During Tarbert's chairmanship, the CFTC completed work on several key Dodd-Frank Act regulations affecting the energy sector, including setting federal position limits and imposing capital requirements for swap dealers and major swap participants.
Behnam, as commissioner, launched efforts to complete a report by an advisory panel to the CFTC focusing on climate risks and made multiple appearances to draw attention to the findings.
The report, by a diverse group of stakeholders, recommended the regulators move urgently to measure and address the risks that climate change poses to the financial system, including by setting an economy-wide price on carbon.
It suggested the CFTC do research to understand how climate risks could affect markets and market participants under its oversight. Regulators were encouraged to work with the private sector to develop standard classification systems for physical and transition risks and to help support the development of a robust system of climate-related risk management products.
Behnam previously worked as a staff member at the Senate Committee on Agriculture, Nutrition, and Forestry, which has jurisdiction over the CFTC and derivatives matters. His background also includes securities oversight in New Jersey's Office of the Attorney General and private law practice.
Once another Democrat is confirmed to join the commission, Republican Brian Quintenz is expected to leave, giving Democrats a 3-2 majority.