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New CFTC Chair Skeptical about SEC Registration Rule

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WASHINGTON (–President George W. Bush designated Commissioner Sharon Brown-Hruska as the new acting chair of the Commodity Futures Trading Commission, effective July 24, 2004.

The White House also said that the president plans to nominate Ms. Brown-Hruska to a second term as commissioner, to expire in April 2009.

Last month, Dr. Brown-Hruska gave the keynote address at an international derivatives conference in London, sponsored by the Futures Industry Association and the Futures Option Association. In this address, she praised hedge funds for the role they play in pumping liquidity into derivatives markets.

“While I am on the topic of funds,” she then said, “it behooves me to speak more generally on the regulation of hedge funds. As many of you know, the U.S. Securities and Exchange Commission has pressed for registration of advisers and managers of hedge funds. It is almost surreal to me that the staff at the SEC has continually failed to acknowledge that most hedge funds are already registered with the CFTC. Based on data collected by the CFTC with help from the NFA, the number of

Institutional Investor’s Platinum 100 largest hedge funds that were registered as commodity pool operators under the CFTC’s delegated authority grew from 55 in 2002, to 65 of the top-100 funds in 2003, and we have continued to see growth in 2004.”

With the departure of James E. Newsome, there are only two commissioners remaining on the CFTC, which statutorily consists of five seats (see Previous HedgeWorld Story).

Prior to joining the CFTC in August 2002, Ms. Brown-Hruska was assistant professor of finance at the School of Management, George Mason University. From 1990 to 1995, she was a staff economist in the CFTC’s Division of Economic Analysis, where she conducted policy and technical research in the areas of anti-competitive behavior and market microstructure of futures, options and derivatives markets.

In her statement July 23 acknowledging the President’s appointment, Ms.. Brown-Kruska said she welcomes “the opportunity to continue working closely with my good friend and colleague, Commissioner Walter Lukken. I am confident that with the assistance and support of Commissioner Lukken and the Commission’s highly dedicated and professional staff, the Commission’s mission to ensure the viability and the integrity of U.S. futures markets will continue unabated.”

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Contact Robert F. Keane with comments or questions at

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