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Enron Mail |
Commodity Law Rewrite Still Alive
CQ Weekly December 9, 2000 A deal to revive legislation (H.R. 4541) that would rewrite the nation=01,s= =20 commodities laws appeared to be in the works after meetings the week of=20 December 4 between representatives of Chicago=01,s big commodities exchange= s and=20 the senator who had been blocking the bill. Representatives of the Chicago Board of Trade and Chicago Mercantile Exchan= ge=20 reached a tentative agreement with Senator Phil Gramm, R-Texas, chairman of= =20 the Banking, Housing and Urban Affairs Committee, on compromise language th= at=20 would reauthorize the Commodity Exchange Act and set new ground rules for t= he=20 trading of a complicated class of investments known as derivatives,=20 congressional aides said. The language was being reviewed by aides to the House Agriculture, Banking= =20 and Commerce committees, each of which had a hand in drafting the original= =20 bill, as well as by the Treasury Department. If there are no objections, the language could be attached to the=20 still-pending fiscal 2000 Labor-HHS-Education appropriations bill (H.R. 457= 7). The original commodities bill passed the House 377-4, on October 19. However, Gramm has blocked the measure because of concerns over how it woul= d=20 affect the legal status if a type of privately negotiated contracts known a= s=20 swaps. Swaps, which are used by large corporations to hedge market risk,= =20 account for a global market worth nearly $90 trillion, according to the Ban= k=20 for International Settlements in Switzerland. The legislation would keep swaps unregulated. It would also give the=20 commodities exchanges a boost by authorizing the trading of futures contrac= ts=20 based on single stocks. Trading such investments on U.S. exchanges is currently prohibited because= =20 the Commodity Futures Trading Commission and the Securities and Exchange=20 Commission cannot agree on who would regulate the instruments. The=20 legislation would give both agencies regulatory oversight.
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