Moved Facts
The Commodity Markets Council provides policy statements to legislators, regulators, industry leaders, and the media, to help them better understand the impact policy can have on the efficient operation of markets. CMC Policy Briefs are educational summaries of important policy issues that include an overview of CMC action, official statements, and general background. CMC Policy Statements represent our official position. Policy Discussions are matters that CMC is currently debating.
BREAKING NEWS
CMC Voices Opposition To Transaction Tax
As the House of Representatives prepares for a vote on climate change legislation before recess, CMC joined with the Futures Industry Association to voice our opposition to the inclusion of a transaction tax on futures and options contracts cleared on US exchanges in the bill.
CMC Letter
Senate Report On CBOT Wheat Market
As expected this week, the Senate Permanent Subcommittee on Investigations released a report finding index speculators adversely impact convergence in the CBOT wheat market.
The report, which comes from a Committee with no jurisdictional authority over derivative markets, makes the following recommendations to improve convergence.
Phase Out Existing Wheat Waivers for Index Traders
The CFTC should phase out existing waivers, granted through exemptions or no-action letters, and re-apply the standard position limit designed to prevent excessive speculation in the wheat market.
Take Further Action If Necessary
If pricing problems in the Chicago market persist after the phase-out of index trader waivers and implementation of other actions being taken by CBOT, the CFTC should consider imposing additional restrictions on commodity index traders to reduce excessive speculation, such as by imposing a position limit of 5,000 wheat contracts per index trader.
Analyze Other Agricultural Commodities
The CFTC should undertake an analysis of other agricultural commodities to determine whether commodity index traders have increased futures prices compared to cash prices or caused price convergence problems, and whether position limit waivers for index traders should be phased out to eliminate excessive speculation.
Strengthen Data Collection for Non-Agricultural Commodities
The report also recommends that the CFTC should develop reliable data on the extent to which commodity index traders purchase non-agricultural commodity futures contracts, especially crude oil and other energy commodities. Once this data is collected, the CFTC should evaluate the impact of index trading in these markets, and whether position limits for index traders should be phased out to eliminate excessive speculation.
The full report is available below. Please note the report is very large and is divided into four parts for easier downloading.
Administration Reform Proposal
With the intent to restore confidence and integrity to the financial system, the Administration unveiled its proposal for financial market regulatory reform. The package, however, does not go as far as many anticipated earlier this year. Instead, the Administration recommends implementing most of its reforms within the existing regulatory structure with the addition of a new Consumer Financial Protection Agency.
Proposals such as merging the SEC and CFTC and creating a new agency to oversee systemic risk - two proposals CMC strongly advocated against - are not included in the Administrations recommendations.
Administration White Paper
Fact Sheet: Increased Oversight of Systemic Risk & Financial Regulation
Fact Sheet: Strengthening Regulation of Core Markets & Market Infrastructure
Fact Sheet: Strengthening Consumer Protection
Fact Sheet: Providing The Government With Tools To Effectively Manage Financial Crisis
Fact Sheet: International Standards
CMC Issues Statement on Regulatory Reform in Financial Markets
CMC Responds To CFTC Questions on Convergence
Policy Briefs
Trade Liberalization
Index Fund Reporting
CBOT's Request to Amend Wheat Contract
Policy Discussions
Agriculture Policy
Reauthorization of the CFTC
Carbon Trading
The Energy Bill: An Amended Renewable Fuels Standard
Financial Accounting Statement 133