NFA Board of Directors Candidate Statement
Brendan R. Kalb, General Counsel & Managing Director, AQR Capital Management, LLC
This is a critical time for our industry. We face a number of new challenges that have resulted from extraordinary instances of malfeasance and profound regulatory changes of the last few years. While regulators have taken a few positive steps, more needs to be done to ensure customers and our markets are better protected. If elected to NFA’s Board, my mission will be clear: to restore and preserve confidence in a rapidly changing futures market by ensuring that NFA fulfills its obligations as a regulatory body, acting swiftly via effective and intelligent self-regulation. I pledge to pursue effective regulation and hold all market participants and intermediaries to the highest levels of integrity. I plan to deliver on those promises by demonstrating effective leadership, promoting best practices, and pursuing thoughtful solutions to market integrity issues in the wake of unparalleled regulatory change and product innovation.
Protecting Customers – I am committed to ensuring that CFTC rules protect customers in the ordinary course of business and through bankruptcies, and have been continually engaged with CFTC Commissioners, policy makers, key regulators and the NFA on this issue.
- I was actively engaged with the CFTC with respect to its proposed FCM residual interest requirement, supporting the customer protection goals and opposing the requirement that customers pre-fund margin obligations or meet intraday margin calls.
- I was a part of the effort to improve the scope and frequency of FCM disclosures to the public.
- I have been actively engaged with Congressional leaders and key staff to underscore the importance of customer protection as part of the CFTC reauthorization legislation.
Full Physical Segregation/Bankruptcy Code Amendments – I am equally committed to working towards necessary legislative and regulatory changes to protect customers from FCM or designated contract market defaults.
- In response to the MF Global and Peregrine crises, I have worked to develop full physical segregation options for customers to use, at their election, to protect their collateral and positions separate from their FCM counterparty and have engaged directly with CFTC staff, central counterparties and FCMs on this issue.
- I plan to remain focused on developing language to amend the Bankruptcy Code to protect “customer property” and facilitate full physical segregation.
CTA/CPO Issues & Derivatives Regulation – Finally, I am dedicated to ensuring that CTA/CPO regulation is pursued in an intelligent manner.
- I have been continuously and actively engaged with the relevant U.S. House and Senate Committees, CFTC, and NFA on the Dodd-Frank Act and changes that significantly impact CTAs and CPOs.
- I have had substantial experience working with NFA leadership as well as NFA senior staffers as a member of the NFA 4.5 Working Group, which was tasked to develop recommendations for NFA’s Rule 4.5 rulemaking.
- I have been actively engaged with the CFTC and NFA on Forms CPO-PQR, CTA-PR and NFA Rule 2-46 to ensure consistent, non-duplicative disclosure.
I am General Counsel at AQR Capital Management, LLC, a CTA, CPO and registered investment adviser where, for the past 11 years, I have been responsible for managing the full spectrum of the firm's legal and regulatory affairs. Prior to joining AQR in 2004, I worked in the Investment Management Group of the New York law firm of Willkie Farr & Gallagher LLP, where I regularly represented registered investment companies, investment advisers, commodity pool operators and commodity trading advisors, involving swaps and futures-related matters. Prior to Willkie, I worked in the Financial Services & Investment Management Department of Seward & Kissel LLP where I primarily dealt in related matters with respect to investment advisers and commodity pool operation. I received my JD from Cornell Law School and graduated magna cum laude with a B.A. in International Relations & Economics from the University of Pennsylvania.
I currently serve as Vice Chairman of the Managed Funds Association’s CTA, CPO and Futures Committee, and as a member of the MFA’s Derivatives & Swaps Steering Committee and the Investment Company Institute’s Derivatives Markets Advisory Committee. I am also currently serving as a member of the CFTC’s Agricultural Advisory Committee, where I hope to be uniquely positioned to comment and advise on issues related to deliverable supplies of agricultural commodities as they pertain to position limits. I have also served on the Board of Advisors of the Institute for Law and Economics, a joint research center between the Law School, the Wharton School and the Department of Economics at the University of Pennsylvania for the past several years.
Given my deep history of involvement with policy makers and regulatory agencies, my familiarity with the swaps and futures industries, and my commitment to customer protection, intelligent regulation, and market integrity, I feel I am well suited to serve NFA’s membership on our Board of Directors. Thank you very much in advance for your consideration.
