Bart Chilton to Propose Derivative Transaction Fee

Bart Chilton to Propose Derivative Transaction Fee

Bart Chilton, Commissioner of the Commodity Futures Trading Commission (CFTC), plans to propose a transaction fee for derivative markets to help fund his agency and tighten regulation.

The idea of a transaction fee has been tossed around for many years, but it has never really gained any steam. Chilton, one of three Democrats appointed to CFTC’s panel, discussed this issue in an appearance on CNBC Squawk Box on Wednesday Morning

“On the transaction fee, this is a thing that’s been proposed by four different administrations, republicans and democrats alike,” Chilton said. “Yet nobody has every really put pen to paper in the executive branch and sent something serious forward to congress. All the other federal regulators are funded by a transaction fee.”

According to the Wall Street Journal, President Obama proposed a user fee to fund the CFTC in his latest budget. The user-fee idea, which was also proposed by the Bush administration, has met resistance from both Republicans and industry groups who argue that it is an industry tax that would harm investors.

Chilton’s plan is charge a fee of $0.0006 per transaction. The commissioner feels that the fee would really help the CFTC, stating, “We could fund $300 million a year, which is what our agency needs.”

He also emphasized that the fee would only impact “speculative trading, not the end user, not for the folks that have skin in the game.”

“There are so many trades going on at lightning speed. They’re scooping up micro-dollars in milliseconds,” Chilton said. Maybe will make them a little more thoughtful about the trades that they’re making.”

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About The Author


Elan Mendel

Elan Mendel

Elan Mendel is an associate with Shipkevich PLLC, and has done registration, compliance, and enforcement defense work for commodities, futures and forex firms registered with the CFTC and NFA as FCMs, RFEDs, and others. Elan also specializes in domestic and cross-border insolvency issues.

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