CFTC continues reg reform; House Ag members push shield bill

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, Aug. 25 - The Commodity Futures Trading Commission (CFTC) plans to vote next month on more rules to implement the Dodd-Frank Act, even though several agricultural interests are pushing back against what they view as unnecessary regulations. The rules under consideration would set a timeline for the market to comply with new swaps regulations.


"Next month, it is my hope that we vote on two proposed rulemakings seeking additional public comment on the implementation phasing of swap transaction compliance that would affect the broad array of market participants," said CFTC Chairman Gary Gensler.

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Gensler made his comments today at the beginning of a two-day conference on commodity markets at CFTC headquarters in Washington. The first day featured presentations of academic papers on commodity index trading, market sentiment, hedging and arbitrage.


The CFTC is scheduled to vote on position limits on Sept 22. Gensler said the Commission is looking for additional public feedback on how to phase in the clearing mandate, the trading mandate, documentation standards and margining.


"These proposed rules are designed to smooth the transition from an unregulated market structure to a safer market structure," he said. "It's critically important for market participants to take time now to plan this new oversight of the industry.”


The regulations included in the Dodd-Frank Act, said by sponsors to bring transparency to the swaps market and lower the risks to the overall economy, are major concerns for many agricultural and small businesses. Citing what he said could be overbearing Dodd-Frank regulations on those businesses, House Agriculture Committee member, Rep. Austin Scott (R-Ga.) recently proposed H.R. 2682, the Business Risk Mitigation and Price Stabilization Act of 2011.


The bill, which has picked up bipartisan support, is said by Scott to ensure smaller agricultural businesses are not subject to the same margin requirements as large financial firms.


"Although Dodd-Frank was meant to provide a stronger market structure for Wall Street firms, many small community banks, manufacturers, and farmer cooperatives could be caught in the wave of regulations that were never intended for them,” said Scott on The Ag Minute. "This bill makes certain that eligible end-users are exempt from margin requirements. It ensures American businesses have the access to the capital and regulatory certainty they need to create American jobs, compete in the global market, and keep our country moving forward," he said.


For information on H.R. 2682, go here:

For Gary Gensler's opening remarks at Conference on Commodity Markets, go here:



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