Statement of Administration Policy: S. 1729 - Futures Trading Practices Act

(Senate)
(Leahy (D) Vermont and 4 others)

The Administration supports enactment of S. 1729 if amended to:

— Include the Administration's proposal entitled the "Capital Markets Competition, Stability, and Fairness Act of 1990" (S. 2814). This proposal would help prevent minor events from triggering major market disruptions.

— Insert the words "both as a separate system or" following "computerized trading" in Section 809 and substitute "encouraged" where the word "directed" first appears. Computerized trading should not be restricted to being an adjunct to the open out cry auction system.

— Eliminate the proposed exemption for the Commodity Futures Trading Corporation (CFTC) from Federal pay caps and the regular compensation system. The Administration supports a Government-wide approach in settina nav ami nei-cnrmoi policies.

— Conform the provision on the CFTC's undercover authority with the provision contained in H.R. 2869, the House-passed CFTC reauthorization bill. The House language would offer greater consistency with current practice.

— Amend Title VII to protect from compelled disclosure certain information provided by foreign regulators. This provision is necessary to ensure that foreign governments are willing to share with the CFTC sensitive financial information.

— Delete the provision that would authorize the General Accounting Office to have direct access to information maintained by futures markets and related organizations. This information can already be obtained from the CFTC.

— Delete the requirement that the CFTC "take into consideration, and endeavor to serve" the producers of agricultural commodities. This requirement would severely compromise the CFTC's role as a neutral regulator.

— Delete the provisions that would assess fees on imported cotton products and restrict honey assessment refunds to importers. These provisions would violate the General Agreement on Tariffs and Trade (GATT).

— Delete the requirement that the CFTC cooperate in efforts to remove trade barriers related to electronic trading systems. Trade issues should receive careful consideration in separate legislation.

The Administration would oppose any amendment to remove or limit the increase in CFTC fee collections and any amendment similar to section 214 of the House-passed version of H.R. 2869. That section purports to limit the President's choice of persons who could be nominated for the CFTC and would conflict with the Appointments Clause of the Constitution.