U.S. House Committee on Agriculture Holds Hearing on CFTC Reauthorization (with Delta Strategy Group Summary)
The House Committee on Agriculture continued its series of hearings on CFTC reauthorization. The latest hearing considered perspectives from a variety of market participants.
The following witnesses testified:
- CME Group Executive Chair and President Terrence A. Duffy (written testimony);
- ICE Futures U.S. COO and President Benjamin Jackson (written testimony);
- NFA President and CEO Daniel J. Roth (written testimony);
- R.J. O'Brien Associates, LLC, Chair of the Board and CEO Gerald F. Corcoran (on behalf FIA) (written testimony); and
- Tulett Prebon CEO Shawn Bernardo (on behalf of the Wholesale Market Brokers Association, Americas) (written testimony).
The Committee questioned witnesses about EU equivalency standards, the Basel III capital requirements, position limits and the bona fide hedging definition, swap execution facilities and swaps trading rules.
CME President Duffy expressed his lack of optimism concerning the positive resolution of cross-border clearinghouse equivalence, but noted that the CFTC has the option to terminate no-action relief that allows foreign boards of trade to operate currently. Additionally, other witnesses voiced their consternation over the CFTC's narrow interpretation of the bona fide hedging definition in the context of position limits and the threat it poses to the traditional risk mitigation practices of commercial end users. The witnesses also conveyed their concern that the Basel III capital requirements will further consolidate the futures commission merchant industry and increase clearing costs.
Click here for a hearing summary prepared by Delta Strategy Group.
See: House Committee on Agriculture's Press Release; Opening Remarks by Chair Austin Scott (R-GA); Webcast of Hearing.
Related news: U.S. House Committee on Agriculture Holds Hearing Regarding CFTC Reauthorization and End Users (with Delta Strategy Group Summary) (March 24, 2015).