Search Form
First, enter a politician or zip code
Now, choose a category

Public Statements

CFTC Reauthorization Act of 2005

Location: Washington, DC

CFTC REAUTHORIZATION ACT OF 2005 -- (House of Representatives - December 14, 2005)

Mr. GOODLATTE. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4473) to reauthorize and amend the Commodity Exchange Act to promote legal certainty, enhance competition, and reduce systemic risk in markets for futures and over-the-counter derivatives, and for other purposes.


Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the Committee on Agriculture brings to the House today H.R. 4473, a bill that, among other things, reauthorizes appropriations for the Commodity Futures Trading Commission through fiscal year 2010. The committee approved the bill last week by voice vote.

The committee began the reauthorization process early this year, holding 2 days of hearings in March when all witnesses supported CFTC reauthorization and testified favorably to the general success of the Commodity Futures Modernization Act of 2000. The CFMA brought legal certainty to the off-exchange derivatives industry and brought the exchange-traded regulatory program into an era when the futures pit is being replaced by electronic trading.

The bill the committee brings to the floor today contains remedies to the areas of concern outlined by then FTC chairman, Sharon Brown-Hruska, in her testimony before the Risk Management Subcommittee. With the assistance of the President's Working Group on Financial Markets, the committee has included the following provisions:

A change to the so-called Treasury amendment contained in section 2(c) of the Commodity Exchange Act to stop unscrupulous persons who write and market contracts in foreign currencies that are nothing more than schemes to defraud the general public; a final resolution to the outstanding issues on establishing risk-based portfolio margining systems for stock futures products and stock options; as well as moving forward on approval of trading on foreign debt indexes and foreign security indexes; of these two matters, the bill provides deadlines for action by the Securities and Exchange Commission and the CFTC; a clarification of the Commission's authority to bring anti-fraud actions in off-exchange principal-to-principal transactions under section 4(b) of the CEA; and a refinement of the CFTC's surveillance program to provide certainty to consumers that the CFTC is looking at significant and highly unusual price moves in natural gas and additional information to the CFTC's large trader reporting system.

A number of end user and consumer groups have endorsed title II of the bill, which was originally drafted by my committee colleagues, the gentleman from Missouri (Mr. Graves) and the gentleman from Georgia (Mr. Barrow). These new provisions will codify the factors the CFTC will consider as they conduct surveillance of volatile markets in natural gas futures and option contracts. I believe this will go a long way to restore the public's trust and confidence that the price discovery mechanism for natural gas is subject only to the factors of supply and demand.

In conclusion, Mr. Speaker, this legislation makes the adjustments in the Commodity Exchange Act that will enable our markets to continue their efficient operations for price discovery and risk management. The legislation will provide additional tools for the CFTC and the self-regulatory organizations under its purview to police the markets and bring enforcement actions for fraudulent business practices aimed at the unsuspecting public. I urge my colleagues to adopt H.R. 4473.

Mr. Speaker, I reserve the balance of my time.


Mr. GOODLATTE. Mr. Speaker, I would also like to thank the gentleman from Minnesota (Mr. Peterson) for the cooperation from him and a number of others on his side of the aisle, and also the gentleman from North Carolina as well as my subcommittee chairman, the gentleman from Kansas (Mr. Moran).

Mr. Speaker, I yield 5 minutes to the gentleman from Ohio (Mr. Oxley), chairman of the Financial Services Committee, another individual who has played a critical part in bringing this legislation to the floor and thank him for his cooperation as well.


Mr. GOODLATTE. Mr. Speaker, I yield myself the balance of the time.

Mr. Speaker, the natural gas language contained in the committee bill makes two changes to the CFTC's current regulatory program to detect and deter manipulation or attempted manipulation.

First, upon a finding that there has been a significant and highly unusual change in the market price of natural gas, the CFTC is required to determine what had caused that price change.

Second, persons with futures or option positions in natural gas are required to keep records of those trades and other related transactions and to submit those records to the CFTC upon request.

In the committee's view, and in my view, this is a reasonable compromise that does not add significant new costs to transactions in natural gas, whether futures or options contracts or other transactions used in over-the-counter strategies of most of the major firms involved in the natural gas markets on a daily basis.

This new recordkeeping requirement is the only part of the legislation that imposes any new regulatory mechanism. The CFTC is not required to impose itself into any new market arena and will not as a result of this legislation. The bill requirements are unobtrusive, contain no burdensome new costs and will be used sparingly.

We have seen over the years, over the course of the last half year, an energy sector that is under great stress. And the price response to that stress has been of great concern to all of us. This bill does nothing to add to that stress, and it should be adopted today.

I urge my colleagues to support this legislation.


Skip to top

Help us stay free for all your Fellow Americans

Just $5 from everyone reading this would do it.

Back to top