Commodity Futures Trading Commission (CFTC)s oversight
of OTC energy markets continued to take center stage in
the CFTC reauthorisation process.
In a hearing on 26 September before a subcommittee of the House
Committee on Agriculture, which oversees CFTC, exchange leaders
urged Congress to fold OTC energy oversight into the CFTC. New
York Mercantile Exchange president Jim Newsome (pictured) told
the Subcommittee on General Farm Commodities and Risk
Management that the Commodity Exchange Act should include
large-position reporting for OTC contracts and any OTC
regulatory changes remain focused on certain products rather
than all OTC products.
Newsome reiterated that sentiment with FO Week at the Canadian
Annual Derivatives Conference in Montreal late September,
calling for better overall transparency for the OTC energy
The CFTC does a good job managing what they can
see, Newsome said. But youve got to be able
to see it in order to manage the risk. I think the transparency
that would come about as a result is extremely
Futures Industry Association (FIA) president John Damgard said
in his testimony before the subcommittee that CFTC already has
some jurisdiction over exempt markets to prevent prices
manipulation and is wary of excess regulation.
FIA does not believe that any statutory change should be
a basis for leveling the so-called competitive playing field in
energy or any other area, Damgard said. Congress
has appropriately allocated regulatory oversight in the CEA
based on differences in market participants, commodities
traded, means of trading, intermediation and even impact on
cash markets. FIA would not support any fundamental change to
that regulatory alignment.
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