Friday, April 11, 2014 4:38:56 AM

New bill wades into CFTC overreach debate

The Commodity Futures Trading Commission (CFTC) may be limited in its ability to enforce new swaps rules if a bill that has gained early support in the US House of Representatives is passed.

The Customer Protection and End-User Relief Act on Wednesday was approved by the US House Agriculture Committee with bipartisan support and may face a full vote on the House floor.

The bill will technically re-authorise the CFTC until September 2018 and give the Committee a chance to review the Commission’s operations. In its present form, it includes sections focused on relief for certain participants for swaps rules – including municipal utilities and end-users.

It also includes provisions to revise CFTC operational requirements.

Committee chairman Representative Frank Lucas said: “This process also allowed the committee to take stock of past events, such as the passage of the Dodd-Frank Act of 2010, the ensuing rulemaking process,” he said. “It is impossible to consider re-authorising the CFTC and the future of the CFTC without recognising the impact of these events on the agency and its response to them.”

Commenting on the bill, US derivatives trade body the Futures Industry Association (FIA) commended the Committee for its bipartisan approach.

“While the process of enacting these statutory changes is far from complete, such thoughtful coordination among the various political interests is critical to ensuring that the final product yields a balanced outcome,” the FIA statement read.

Richard Henderson +1 212 217 6916