Date: 1995-04-06
Speaker: DE LA GARZA (democrat)
Chamber: H

I thank the gentleman for his comments. Mr. Speaker. I support the legislation. Mr. Speaker. I commend the distinguished chairman of the Agriculture Committee. Mr. ROBERTS. as well as the chairman. Mr. EWING. and ranking minority member. Mr. ROSE. of the Risk Management and Specialty Crops Subcommittee for their leadership in providing for the expeditious consideration of S. 178. the Commodity Futures Trading Commission Reauthorization Act of 1995. This Senate bill is identical to H.R. 618 which was reported unanimously from the Committee on Agriculture without amendment. The bill authorizes appropriations to carry out the Commodity Exchange Act for each fiscal year through 2000 and I strongly support its passage. In the legislative activity leading up to the enactment of the Futures Trading Practices Act of 1992 (FTPA. Public Law 102546). Congress considered and ultimately enacted a number of new responsibilities and authorities for the Commodity Futures Trading Commission (CFTC]. Those changes were designed to enhance the effectiveness of our futures regulatory system. while accommodating the evolutionary processes which are transforming world financial markets. Our philosophy has been and should continue to be that fair markets are efficient markets. and that a sound. rational and independent regulatory system contributes to their efficiency. The CFTC has made extraordinary progress in carrying out the mandates of the 1992 Act. The Commissions pace demonstrates clearly that it shares the same sense of importance that we had in Congress when those important changes to the Commodity Exchange Act were adopted. As a few examples. since the FTPA was enacted the CFTC has: Approved final rules exempting swap transactions. hybrid securities. and energy contracts meeting specified criteria from the exchangetrading and other requirements of the CEA. Approved final rules prohibiting dual trading on highvolume contract markets that do not have adequate systems for monitoring trading activity. Proposed rules to allow existing futures exchanges to sponsor trading among entities meeting qualifying criteria with relief from some of the regulatory strictures that otherwise would apply. and Approved final rules regarding procedures for exchange emergency actions. In addition. the Commission has submitted five mandated reports to Congress. Notable - among these was The Study of Swaps and OffExchange Derivatives--one of the more complete and informative discussions of that issue available. Meanwhile. our Nations futures markets have continued to grow and innovate. During fiscal year 1994 alone. the Commission approved trading in 28 new futures and options contracts. Futures and options volume on the exchanges increased by 27 percent to 510 million trades in fiscal year 1994 from the fiscal year 1993 level of 402 million. While the increased use of U.S. futures exchanges demonstrates the confidence that financial risk managers have in these markets. trading on offshore futures marketswhich in many cases trade contracts similar to those on U.S. exchangeshas grown even more rapidly. In its report to Congress. A study of the Global Competitiveness of U.S. Futures Markets. April 1994. the CFTC noted U.S. exchanges declining share of global futures trading. That trend is largely explained as the initial growth stage in the relatively new. foreign futures markets rather than a reflection of significant cost advantages. It should. however. make us aware in our regulatory policy decisions that we need to balance our efforts to ensure that the markets are sound and fair. with a recognition of the potential for excessive regulatory burdens to disadvantage U.S. futures markets visavis their foreign competitors. In their efforts to modernize and to comply with trade monitoring requirements in the Commodity Exchange Act. U.S. exchanges continue to work towards the development and implementation of automated audit trail systems. These systems promise to greatly enhance the ability of exchange and Commission enforcement officials to prevent fraud and punish cheaters. Finally. Commission Chairman Schapiro. other Commissioners. and Commission staff continue to be actively engaged in interagency policy coordination regarding securities and securities derivatives markets. overthecounter derivatives. and other matters of importance in market regulation. In this effort. the Commission has rightfully asserted itself as the expert regulatory agency where derivative markets are concerned. Given the agencys substantial progress in carrying out the will of Congress expressed through the FTPA. I strongly support passage of this bill to extend the Commissions reauthorization through fiscal year 2000. Mr. Speaker. I withdraw my reservation of objection.