Tuesday the House approved its bill reauthorizing the Commodity Futures Trading Commission by a vote of 265-144.
The House allowed for limited debate on the bill, and allowing just a handful of amendments to be debated.
During his floor statement in support of the bill, House Agriculture Committee Chairman Frank Lucas (R., Okla.) and co-sponsor of the bill, said the bill is years in the making and thanked his colleagues from both sides of the aisle for the hard work on the bill.
“Ultimately, we developed legislation to reauthorize and reform the CFTC in a way that would not only improve operations at the agency, but also protect customers from another market failure like what we saw with MF Global and PFG Best. Our efforts will also increase certainty in the marketplace and provide a more balanced approach to regulations impacting job creators,” Lucas said.
By a voice vote the House approved an amendment that calls for the study on high frequency trading on whether such trading increases market volatility, including short term market swings such as the “flash crash.”
The full House also approved an amendment by a vote of 252-158 which would exempt Registered Investment Companies (RICs) that are currently registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940 from duplicative registration requirements with the Commodity Futures Trading Commission (CFTC) allowing the SEC to continue to have full regulatory oversight and enforcement authority over RICs. The amendment does not remove the jurisdiction and regulatory authority that the CFTC has over all futures, options and swaps transactions that the RICs invest in on behalf of their customers who are pensioners, retirees, and savers.
The Senate has yet to propose its CFTC reauthorization bill, although Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) said her committee plans to take up a bill as well. She said the House’s bill has areas the two chambers can certainly work together on.
“The Senate will examine lessons from the past and consider ongoing challenges to the system as we write our bill. We have an important opportunity for market reform, to restore faith in the markets and help ensure they are transparent and functioning as intended – and we intend on doing that in a collaborative and bipartisan way,” she said.
Stabenow expressed disappointment with the House bill as it provides no additional funding mechanism and adds new layers of administrative burdens, hindering the agency’s ability to do its job and effectively regulate these markets.