Chairman Frank Lucas today released the following statement on Scott O'Malia's last day as Commissioner of the Commodity Futures Trading Commission (CFTC). Last month, O’Malia announced he would resign to pursue other opportunities.
Commodity Futures Trading Commission Reauthorization Approved
WASHINGTON, D.C. – The House Committee on Agriculture today approved by voice vote a Chairman’s Mark to reauthorize the Commodity Futures Trading Commission (CFTC). The CFTC was last reauthorized four years ago resulting in the enactment of the Commodity Futures Modernization Act of 2000 (CFMA). The Chairman’s Mark reauthorizes appropriations for the CFTC and includes provisions to remedy regulatory issues left unresolved following the enactment of CFMA or have arisen recently regarding futures market volatility and increasing market prices in natural gas markets.
“The underlying legislative proposal before the Committee today deals with a recurring problem of unscrupulous persons who prey upon the unsuspecting by offering tantalizing ways to make a killing in foreign currency transactions. These persons continue to find new ways to develop and market their products to skirt the Commodity Exchange Act,” said Chairman Goodlatte in his opening statement.
The CFTC Reauthorization Act of 2005:
• Clarifies CFTC’s authority over agreements, contracts or transactions in foreign currency.
• Expands CFTC’s antifraud authority to include principals. This language will provide CFTC with the authority to pursue principals as well as their agents in the event of fraud.
• Requires the Securities and Exchange Commission (SEC) and CFTC to develop a regulatory division of authority to authorize risk-based portfolio margining for security options and security futures products by September 30, 2006 and authorize the trading of certain debt and foreign security indexes by June 30, 2006.
• Authorizes appropriations through fiscal year 2010.
Additionally, the Chairman offered an amendment to further clarify surveillance and record keeping authorities to make the natural gas futures markets more transparent. The amendment charges the CFTC with preventing and detecting manipulation of the natural gas markets, outlines increased record keeping requirements for people who operate on the exchanges, and increases the penalties for violations. The amendment was agreed to by voice vote.
This legislation enjoyed bipartisan support in the Committee. “The Committee’s action today to approve the CFTC reauthorization signals strong, bipartisan support for ensuring the continued stability of the futures market. This reauthorization is an important priority for Congress because the CFTC plays a critical role in protecting investors from fraud and preventing abuse in the trading system,” said Ranking Minority Member Collin Peterson.
The Committee will continue to work with other committees with shared jurisdiction to move this legislation forward.