CMC Calls On Congress To Oppose Transaction Tax
CMC voiced its opposition to the President's budget proposal to implement transaction "fees" on futures and option contracts traded on approved exchanges in a letter sent to the House and Senate Agriculture Committees, Budget Committees, and Agriculture Appropriations Subcommittees. The President's proposal would generate 75 percent of the annual budget of the Commodity Futures Trading Commission (CFTC) - approximately $116 million.
CMC pointed out that with increasing competition both domestically and internationally, such a tax would "severely hinder the ability of US futures markets to compete." As a result, CMC argued the transaction tax would "damage the liquidity in U.S. futures markets, leading to further increased costs for market participants as bid-ask spreads widen."
Moreover, CMC explained that the oversight provided by the CFTC ensures public confidence and market integrity and protects market participants against manipulation, abusive trade practices, and fraud. Because everyone benefits from these activities, CMC reasoned, the burden should not rest solely on the shoulders of market participants.