“Chairman Collin Peterson, who spearheaded the effort to elevate the role for the Commodity Futures Trading Commission in the regulatory regime, said he believed the bill would end the ‘dark markets’ which many credit for a major role in the 2008 financial meltdown. Details of the final ‘manager's amendment’ to the bill, which both Peterson and Rep. Frank Lucas, the committee's ranking Republican from Oklahoma, called a bipartisan effort, were worked out just hours before the committee advanced the bill on a voice vote.”
Though it passed on a voice vote, the bill is not without controversial issues, some of which came out during the committee’s debate. Reps. Goodlatte (VA) and Markey (Colo) shared concerns that the bill’s costs might drive traders to move offshore. Two that end they were able to secure an amendment to the bill that requires a one-year study of the issues, which will be conducted by the Commodities Futures Trading Commission, following the study, within a month, the House Agriculture committee would be required to hold a hearing on the findings.
The journey for derivatives reform still has many hurdles to clear before the President will sign anything. For one, the agriculture bill has to be meshed with the legislation that came out of the House Committee on Financial Services Committee (FSC). Peterson noted there are several differences in the bill, and presumably these differences would be hammer out before any floor vote will take place.
“A House Agriculture Committee statement reports the bill "institutes a clearing and trading requirement for all OTC swap transactions between dealers and large market participants that are accepted by a clearinghouse. Non-cleared swaps must be reported, with major participants and dealers adhering to strengthened capital and margin requirements. The bill exempts commercial end users who use derivatives markets to hedge their price risk from the clearing requirement."To read the Feedstuffs online article click here.
For more information on the Bill from the House Committee on Agriculture, click here.
Posted: 10-22-09
