“SNAP is essential in protecting the most vulnerable citizens during tough times, but we need to have a complete understanding of its mission and purpose.” That was the message from House Agriculture Committee Chairman K. Michael Conaway this week as the committee began its top-to-bottom review of the Supplemental Nutrition Assistance Program (SNAP), previously known as food stamps.
Agriculture Committee Strengthens Oversight of Futures Markets
Bipartisan Measure Increasing Market Transparency Passes by Voice Vote
WASHINGTON - Today, the House Agriculture Committee approved a bipartisan measure to increase transparency, oversight, and anti-manipulation authority over futures and options markets. By voice vote, the Committee approved draft language of The Commodity Markets Transparency and Accountability Act of 2008, sponsored by Agriculture Committee Chairman Collin C. Peterson of Minnesota.
“Although difficult to quantify, the potential influence of speculative trading on futures markets is a real issue, with the crude oil and agricultural markets seeing record volatility and a lack of convergence between futures and cash prices in some contracts” said Chairman Peterson. “Today’s action will bring much-needed transparency to commodities and futures markets, helping to restore the markets as a mechanism for price discovery and risk mitigation that work to benefit producers, processors and consumers.”
Provisions included in The Commodity Markets Transparency and Accountability Act would:
- Require foreign boards of trade to share trading data and adopt speculative position limits on contracts that trade U.S. commodities similar to U.S.-regulated exchanges.
- Require the Commodity Futures Trading Commission (CFTC) to set trading limits for all agricultural and energy commodities, in order to prevent excessive speculation.
- Limit eligibility for hedge exemptions to bona-fide hedgers.
- Codify CFTC recommendations to improve transparency in dark markets by disaggregating index fund and other data in energy and agricultural markets as well as requiring detailed reporting from index traders and swap dealers.
- Call for a minimum of 100 full-time CFTC employees to enforce manipulation and prevent fraud. Despite record trading volume in the futures and options markets, CFTC staffing is at its lowest level since the agency was created in 1974.
- Authorize CFTC to take action if it finds disruption in over-the-counter markets for energy and gas.
- Require the CFTC to study the effectiveness of establishing position limits in over-the-counter markets.
In addition to approving a manager’s amendment containing technical changes, the Committee also approved an amendment by Congressman Jim Marshall of Georgia that would change the proposed public disaggregation of index fund and other data in energy and agriculture markets from monthly to weekly. Both amendments were adopted by voice vote.
Congressional oversight of commodity futures trading is under the jurisdiction of the House Agriculture Committee, chaired by Congressman Peterson. The Committee held three days of hearings earlier this month reviewing CEA legislation. The Farm Bill, enacted into law earlier this year over the President’s veto, reauthorizes the chief regulator of these markets, the CFTC, through 2013.
The approved draft legislation, adopted amendments, and a section-by-section summary can be found on the House Agriculture Committee website.