Subcommittee Passes Commodity Futures Modernization Act of 2000
Washington, DC --Today, House Agriculture Subcommittee on Risk Management, Research and Specialty Crops led by Chairman Tom Ewing (R-IL) passed by voice vote his legislation (H.R. 4541) which reauthorizes the Commodity Exchange Act (CEA) and modernizes laws for futures, futures options, and swaps.
"This bill substantively addresses the most important reforms discussed in prior Subcommittee hearings, and with today's amendment addresses many issues that we have heard since then," Ewing said. "It's clear to anyone following this issue that CEA reauthorization is an extremely complex issue and that passing this legislation is an ongoing and evolving process that will require constant effort along the way."
Before passing H.R. 4541, the Subcommittee accepted by voice vote an amendment introduced by Rep. Nick Smith (R-MI) which instructs the Commodity Futures Trading Commission (CFTC) to explore ways to facilitate the use of contract markets by domestic agricultural producers who wish to hedge their risks.
The Subcommittee also accepted Chairman Ewing's amendment in the nature of a substitute. Among other changes, the amendment allows government securities to be traded on the derivatives transaction execution facility level. The amendment also provides the CFTC with anti-manipulation authority for energy commodities.
Authorization for the Commodity Exchange Act expires on September 30, 2000. The Commodity Futures Modernization Act of 2000 reauthorizes the CEA for five years and would reform the Act in three primary ways:
1) incorporates the President's Working Group findings on legal certainty for over-the-counter (OTC) derivatives;
2) codifies the regulatory relief proposal of the Commodity Futures Trading Commission (CFTC);
3) reforms the Shad-Johnson jurisdictional accord regarding futures on securities.
"We are on an expedited time frame to pass CFTC reauthorization this year," Ewing said. "Now that banking modernization has been dealt with, it is time for the financial industry to move onto CEA modernization. While it has been difficult at times, we've made a strong attempt to craft legislation that is acceptable to all interested parties. I fully expect the full Committee to pass H.R. 4541 next week, and I look forward to working with the Senate side in upcoming months."