Walter Lukken, formerly the top regulator of the U.S. futures business, has been named to take over as the industry’s chief lobbyist in Washington.
Lukken will become head of the Futures Industry Association by March, succeeding John Damgard, who has led the trade body since 1982 and established the FIA as one of the most influential Washington advocates for financial services.
The leadership change comes as the U.S. futures industry continues to grapple with the collapse of MF Global Holdings Ltd. (MFGLQ), among the biggest crises in the sector’s 163-year history.
Regulators at the Commodity Futures Trading Commission, meanwhile, are crafting new rules that will expand some of the futures market framework into the much-larger market for privately traded swap contracts, an undertaking that has also prompted the Futures Industry Association to broaden its own functions.
Lukken is now chief executive of New York Portfolio Clearing, a derivatives clearinghouse co-owned by NYSE Euronext (NYX) and the Depository Trust and Clearing Corporation. He will stay on in that position until late February and take up his new job in time for the next annual meeting of the FIA board of directors scheduled for March 12.
NYSE said in a statement that NYPC is “in the advanced stages of a CEO search and expects to make an announcement in the near future.”
Before joining New York Portfolio Clearing, Lukken was acting chairman of the CFTC, leading the agency for an 18-month period before departing in 2008. Lukken was nominated as a CFTC commissioner in 2002 by President George W. Bush after serving as a counsel to the Senate Agriculture Committee.
Damgard will remain with the FIA as a senior adviser, according to a statement from the group.
Lukken’s “regulatory and legislative experience and leadership skills will be a tremendous asset as this industry engages in the far-reaching structural reforms mandated by Dodd-Frank and similar laws around the world,” Damgard said in the statement.
Dennis Kelleher, president and CEO of Better Markets, a non-profit advocacy group, said that Lukken’s move is “the latest example of what has become a routine, but pernicious practice” of people moving back and forth between regulatory agencies and industry.
“The public sees them swinging through the revolving door and cashing in from the very organizations they were supposed to be regulating,” Kelleher said in a statement.
Lukken will be dealing with his own successor, CFTC Chairman Gary Gensler, as the CFTC under the Dodd-Frank financial law has expanded its jurisdiction and taken a tougher tone with the Wall Street banks that number among the FIA’s membership.
When Lukken headed the CFTC, he backed a more flexible, “principles-based” approach to regulation, different from what was seen as the prescriptive and “rule-based” methods employed by the Securities and Exchange Commission, which polices stock markets.
In the wake of the Dodd-Frank rulemaking, some in the industry have voiced concerns that the CFTC is becoming more like the SEC and doing less to work with the futures industry to develop new markets for hedging risk.