Nymex 'Outraged' Over Passage of Futures Bill
The New York Mercantile Exchange expressed outrage Friday over
passage of H.R. 4541 by the House of Representatives on Thursday.
The Commodity Futures Modernization Act of 2000 would exempt
electronic energy derivatives trading from regulatory oversight.
New York Mercantile Exchange Chairman Daniel Rappaport said the
exchange "finds it particularly egregious that, by approving
subsection (g) (3) of Section 106, the House would not only remove
the energy and metals marketplaces from public scrutiny and
regulatory oversight, but also [would] do this in a fashion that
discriminates between established markets versus start-up
The legislation could lead to a significant migration of energy
derivatives trading away from Nymex to the multiple unregulated
energy trading platforms being developed.
"It is particularly outrageous," Rappaport added, "at a time
when every U.S. consumer is feeling the impact of high energy
prices, to allow lobbying by a small group of vested interests to
influence Congress to take these markets out of the public eye and
create an advantage for people to trade on private, proprietary
systems lacking the protections of a neutral self-regulatory
organization. Policymakers, regulators, and the American public
will be deprived of currently available information on market
participation, concentration, and financial performance."
Rappaport said Nymex intends to "fight adamantly at the Senate
level to demand that this subsection either be eliminated or be
amended to create a consistent regulatory policy for electronic and
open outcry markets."
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