WASHINGTON, April 4, 2013 – Implementation of legislation (H.R. 1003) that would require the Commodity Futures Trading Commission (CFTC) to quantify the costs and benefits of future regulations and orders would cost $28 million to implement over the 2014-2018 period, the Congressional Budget Office said Wednesday.

The bill, approved by the House Agriculture Committee on March 30, would mandate that the CFTC quantify the impact of market liquidity, which supporters say is “a marked change from the current policy of just considering costs.”

The legislation, introduced by Rep. Michael Conaway, R-Tex., seeks to update the commission’s current requirements to require the examination of the impacts on the previously unregulated swaps markets, a necessary addition because of new authority given to the CFTC under the Dodd-Frank Act.

The bill also would require the CFTC’s chief economist to be involved in the cost-benefit analysis. Only future proposed rules would be affected, so the legislation would not require retroactive analysis of pending proposals.

“If regulators do not bother to calculate how much it costs to comply with a proposal or to systematically quantify what the expected benefits of a proposal will be, then they cannot make educated decisions,” Conaway said. “A clearheaded analysis of the costs and benefits of all available options must be the foundation of the regulatory process. This small mandate on the economists and lawyers at the CFTC will ensure that the burdens placed on businesses large and small are justified in the real world, not just in the pages of the Federal Register.”

Conaway is the chairman of the House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management.

The CBO said the cost estimate is based on information from the CFTC, and that enactment would not affect direct spending or revenues.


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