Legislation is Designed to Maintain U.S. Leadership in Finance

Jun 14, 2000

Subcommittee Reviews Commodity Futures Modernization Act of 2000
Legislation is Designed to Maintain U.S. Leadership in Finance

Washington, D.C. — Today, House Agriculture Subcommittee on Risk Management, Research and Specialty Crops Chairman Tom Ewing (R-IL) convened a hearing to review his recently introduced legislation (H.R. 4541) which reauthorizes the Commodity Exchange Act (CEA) and modernizes laws for futures, futures options, and swaps.

"I believe this bill substantively addresses the most important reforms discussed in prior Subcommittee hearings," Ewing said.  "For the first time, members of the President's Working Group (PWG), many of the futures exchanges, and many over-the-counter parties have agreed on a framework to deal with these complex issues.  I believe that now is the time to modernize finance in these areas."

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) it incorporates the President's Working Group findings on legal certainty for over-the-counter (OTC) derivatives;
2) it codifies the regulatory relief proposal of the Commodity Futures Trading Commission (CFTC);
3) it reforms the Shad-Johnson jurisdictional accord regarding futures on securities.

"While it may be difficult, we shall make a strong attempt to pass comprehensive legislation which addresses all three of the major provisions in my bill," Ewing said.  "Now that banking modernization has been dealt with, it is time for the financial industry to move onto CEA modernization, and I plan to hold a Subcommittee mark-up before the end of June.  Senator Lugar, Senator Gramm, and Senator Fitzgerald have introduced a Senate bill and are also striving to hold hearings soon.  We all are on an expedited timeframe to pass legislation."

Representatives from the PWG, which includes the CFTC, the Securities and Exchange Commission (SEC), the Treasury Department, and the Federal Reserve Board testified at today's hearing.