referred to the Senate Agriculture Committee, would expand CFTC
powers to prevent excessive speculation. Main points:
- CFTC would convene a working group of international
regulators to develop uniform reporting and regulatory
standards to protect energy futures from excessive speculation,
manipulation or trading practices that pose systemic risk.
- CFTC would set position limits on energy and agricultural
futures contracts. Exchanges must adopt and enforce position
limits on contracts with a significant price-discovery role.
- CFTC would have oversight of any major commodity market
disturbance that disrupts liquidity or price discovery.
- Index and swaps dealers would be required to provide
detailed reports of their activities.
Approved by the House Agriculture Committee, HR 977
requires clearing of OTC transactions, expands CFTC's powers to
control speculation and gives CFTC criminal-prosecution power.
Its main points are:
- OTC transactions must be cleared through central
clearinghouses, unless the CFTC grants an exemption.
- CFTC can suspend trading in "naked" credit default swaps
related to securities barred from short-selling by the
Securities and Exchange Commission.
- CFTC is required to set position limits for physically
deliverable commodities for the spot month, each month and
aggregate totals for all months.
- If needed to assure liquidity and unbiased price
discovery in agricultural and energy futures markets, CFTC can
impose position limits on look-alike OTC contracts.
(Compiled by Charles Abbott, Christopher Doering, and Jasmin