Statement of Administration Policy: S. 2045 - Futures Trading Act of 1986

(Senate)
(Helms (R) North Carolina and Lugar (R) Indiana)

The Administration objects to Senate passage of S. 2045 unless it is amended to delete Title II which would prohibit leverage contracts. The Administration does not believe that there is any valid justification for prohibiting leverage contracts. By prohibiting such contracts among willing buyers and sellers,

Title II would unnecessarily impair the operation of markets and serve no public purpose. In this regard, the Administration also believes that the Commodity Futures Trading Commission's (CFTC) "temporary" moratorium on entry into the leverage business, which has limited the industry to two firms since 1979, is highly anticompetitive and should be lifted at the earliest possible time.