Scott O’Malia
Scott O’Malia, a Republican commissioner on the Commodity Futures Trading Commission, announced Monday that he will resign effective August 8.

O’Malia, who was named to the commission in 2009, is serving a term that expires in April 2015. In a letter to President Barack Obama, O’Malia said he is resigning “to pursue other opportunities.”

In a speech in New York last Tuesday, O’Malia noted that with the recent confirmations of Chairman Timothy Massad and Commissioners Sharon Bowen and Christopher Giancarlo, the commission had a full complement of five commissioners and said, “I look forward to working together collegially with them on the remaining Dodd-Frank rulemakings and implementation, including corrections to the rules when necessary. I am encouraged by the progress the commission and CFTC staff have made so far in thoughtfully reexamining our rules in response to press reports and dialogue with market participants.”

In his letter to Obama, O’Malia noted that he had not agreed with the all rules that the commission adopted in the wake of Dodd-Frank, but felt he had contributed to the debate.

But in his speech to the Quadrilateral meeting of the European Financial Markets Lawyers Group, the Financial Law Board, Financial Markets Law Committee and Financial Markets Lawyers Group at the Federal Reserve Bank of New York last week, O’Malia said he was worried that CFTC regulations are negatively impacting liquidity for end-users and making hedging too costly, and that diverging regulatory approaches among the G-20 countries are causing market fragmentation and a fracturing of liquidity between U.S. and non-U.S. markets.

O’Malia said that, like doctors, “regulators must first do no harm.”

He said suggested that the commission should fix rules that have negatively impacted the markets, that international regulators work together by pursuing an “outcomes-based approach,” and that the commission invest in technology. He also endorsed the Commodity Exchange Act reauthorization that recently passed the House of Representatives.

Futures Industry Association President and CEO Walt Lukken praised O’Malia for his leadership as chairman of the CFTC’s Technology Advisory Committee and “for his efforts to bring the end-user perspective into the regulatory dialogue, particular with respect to Dodd-Frank, and for his emphasis on the value of empirical data in the rule-making process.”

▪ Keynote Address by Commissioner Scott D. O’Malia at the Quadrilaterial Meeting of the European Financial Markets Lawyers Group, Financial Law Board, Financial Markets Law Committee, and Financial Markets Lawyers Group
▪ O’Malia’s resignation letter to President Obama