The Senate Agriculture Committee and Appropriations Subcommittee on Financial Services and General Government plan to hold a joint hearing next Tuesday (June 17) to explore the need for additional funding, staffing and authority for the Commodity Futures Trading Commission (CFTC), the agency charged with the regulation of energy futures and other commodities.
“CFTC has [the] critical responsibility to protect and ensure the integrity, fairness and transparency of our nation’s futures, options and derivatives markets. Yet at a hearing before the Senate Agriculture Committee last [Wednesday], CFTC officials testified that additional resources, including more staff, are needed to help this agency carry out this mission. With our economy facing volatile markets and high energy prices, we need to ensure that the CFTC has the resources and authority it needs,” said Senate Agriculture Committee Chairman Tom Harkin (D-IA).
CFTC Commissioner Bart Chilton told the agriculture panel last week that the agency could use as much as $157 million annually (see Daily GPI, June 5). But President Bush’s budget request for the CFTC in fiscal year 2009 is $130 million.
Acting CFTC Chairman Walter Lukken said that the number of staff members at the agency was at a “historic low” of 450. “Since the CFTC opened its doors 33 years ago, the volume on the futures exchanges has grown 8,000% while the CFTC’s staffing numbers have fallen 12%,” he noted. “We certainly need more bodies at the agency.”
Trading in commodity markets has exploded from nearly 500 million trades in 2000 to more than three billion trades last year, but the CFTC’s funding and staffing have not kept pace to oversee the sharp run-up in trading activity, said Sen. Richard Durbin (D-IL), chairman of the Appropriations Subcommittee on Financial Services and General Government, which is responsible for overseeing the budget of the CFTC.
In addition to more funding and staff, “it’s time to open the books on the oil futures market,” Durbin said. “The agency in charge of regulating oil [and natural gas] markets is currently blocked from accessing critical information on trades made on foreign exchanges or on over-the-counter trades. We can’t expect the CFTC to properly monitor the market and keep gas prices stable if they don’t have the information they need. Congress needs to give [the] CFTC the authority to monitor these trades closely and the staff and IT [information technology] systems to get the job done.”
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