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Nymex 'Outraged' Over Passage of Futures Bill

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 electronic forums."

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."

Rocco Canonica

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