Date: 1991-03-05
Speaker: DE LA GARZA (democrat)
Chamber: H

Mr. Speaker. I yield myself such time as I may consume. Mr. Speaker. this legislation. the Commodity Futures Trading Act of 1991. extends the authority of the CFTC. the Commodity Futures Trading Commission and provides the power and the regulatory tools it needs to effectively protect investors and the American public in the new age of global trading of commodity futures contracts. The bill is nearly the same as passed this House in 1989 by a vote of 420 to nothing. Basically. let me say that the difference between this bill and the 1989 bill which was approved 420 to nothing consists of five items. The bill authorizes appropriations for the Commodity Futures Trading Commission for the fiscal years 1992 and 1993. This is different. of course. from last year. Second. it amends the legislation authorizing the Commission to seek money penalties in court actions. Third. it has an amendment to the provisions authorizing penalites for felony violations of the bills insider trading provision. Fourth. it contains a technical clarification of the language regarding the enforcement of civil penalties. And fifth. it has an amendment deleting from the bill an unrelated technical amendment that has since been enacted in other legislation. Those. my colleagues. are the differences from the 1989 bill. Let me say that it has provisions pertaining to the authorization for appropriations. limitations on certain trading practices. audit trail requirements. regulation of stock index futures. penalties. enforcement powers. selfregulatory requirements. enhancement of registration requirements. qualifications for CFTC commissioners. court jurisdictions. and then it authorizes several studies. Basically. it is the same legislation. Mr. Speaker. It is time to give the Commodity Futures Trading Commission the power and the regulatory tools it needs to effectively protect investors and the American public in the new age of global trading of commodity futures contracts. H.R. 707. the Commodity Futures Improvements Act of 1991. is regulatory reform legislation designed to achieve the level of protection investors and the public deserve. This bill is nearly identical to legislation unanimously approved by the House in 1989 by a vote of 420 to 0. H.R. 707 has four major components: First. it will significantly. strengthen the powers of the Commission in regulating the futures markets. Second. it will put in place important trade practice reforms of the futures exchanges themselves. Third. the bill will substantially increase penalties which may be imposed for criminal violations of the Commodity Exchange Act.- It will also prohibit those individuals who have been convicted of criminal violations from being registered as a broker or other market participant under the Commodity Exchange Act. And fourth. H.R. 707 will give the CFTC the authority it has requested to become a full partner in international efforts to coordinate futures market regulation and enforcement for the benefit of market users and the general public. Mr. Speaker. 2 years ago public confidence in the integrity of the futures trading industry and the Federal regulation agency that oversees its activities was severely shaken. In January 1989 the Justice Department revealed that it had conducted an undercover investigation of alleged illegal trading activities in the pits of the Chicago futures exchanges. The investigations revealed that some floor trades were using their positions to reap illicit profits at the expense of futures market users. It was in the aftermath of that investigation back in 1989 that the House Agriculture Committee set out to address various shortcomings in current futures trading laws and develop legislation to limit opportunities for abuse. The Committee on Agriculture reported H.R. 2869. the Commodity Futures Improvement Act. to the House on September 7. 1989. On September 13. 1989. the House unanimously passed the bill by a vote of 420 to 0. The bill before us today. H.R. 707. is nearly identical to the 1989 legislation approved by the House. Despite the broad support for this legislation expressed by the House in 1989. floor action in the other body never occurred during the 101st Congress. No conference was possible and the legislation died. What happened? Its simple. The real need to strengthen futures trading regulation was forced to take a back seat to a purely Washington syndrome known as a turf fight. At issue was a blatant jurisdictional grab by another Federal agency to regulate a financial instrument called stock index futures. This jurisdictional turf grab was attempted at the expense of the clearly expressed desire of the House in 1989 to protect the publics interest through enactment of responsible legislation. Mr. Speaker. it is time to get the ball rolling again and I urge the House to once again approve this significant legislative enhancement of the powers of the Commodity Futures Trading Commission. To the credit of the Commission and its chairman. Wendy Gramm. the agency has used its current powers and resources effectively. The Congress needs to do its part by giving the Conimission the authority it needs to ensure the fairness and integrity of the everchanging futures market. Mr. Speaker. passage and enactment of H.R. 707 into law will result in increased public confidence in the integrity of the futures trading industry. Improved public confidence in the markets will lead to increased participation by farmers. individual investors. institutional investors and other market participants. both domestically and around the world. who can capitalize on the benefits afforded by futures markets when the trading is unquestionably fair and open. This bill will also benefit the Nation by assuring that the U.S. commodity futures industry maintains its status as the preeminent futures market in the world. I commend the House Agriculture Subcommittee on Conservation. Credit. and Rural Development. and its chairman. Congressman GLENN ENGLISH and its ranking minority member. ToM COLEMAN for their work over the past 2 years on this issue. This bill is long overdue and I urge my colleagues to lend it their support. I ask unanimous consent that a brief explanation and summary of H.R. 707 be inserted in the CONGRESSIONAL RECORD at this point.