Statement of Senator Feinstein on House Passage of Comprehensive Anti-Speculation Legislation
Sep 18 2008
Washington, DC – U.S. Senator Dianne Feinstein (D-Calif.) today issued the following statement regarding the House approval of a comprehensive anti-speculation bill.
“The House of Representatives today approved a measure to help strengthen energy market oversight and crack down on excessive speculation. It’s a major step in the right direction.
Importantly, this bill will:
- Close the London Loophole, to prevent U.S. energy futures from being traded on foreign exchanges with no oversight and no speculation limits.
- Require the CFTC to improve transparency and reporting requirements for swaps dealers who impact prices on regulated energy markets. This will help the CFTC detect possible trading abuses.
- Increase reporting requirements for over-the-counter commodity trading, to ensure that the CFTC has a clear picture of all trading in over-the-counter commodity markets by requiring traders in these markets, including institutional investors, to follow the same reporting standards as other commodity investors.
Bottom line: this bill will substantially boost the oversight authority of the CFTC and begin to fix our nation’s broken energy markets. The Senate should soon follow suit.”
Key provisions of the bill sponsored in the Senate by Senator Feinstein:
- Closing the London Loophole: This provision, modeled after a bill first introduced by Senator Carl Levin (D-Mich.) and Senator Feinstein in May, would ensure that the CFTC has the responsibility to prevent manipulation and rampant speculation by traders that use foreign exchanges to trade U.S. energy futures.
- Closing the ‘Over-the-Counter’ Loophole: This provision, modeled after a bill introduced by Senators Levin and Feinstein in July, would give the CFTC new oversight authority to monitor individual traders in non-electronic exchange over-the-counter (OTC) markets.
Improves the quality of reporting by Index Traders and Swaps Dealers: This provision, modeled after a bill introduced by Senator Feinstein and Senator Ted Stevens (R-Alaska) in June, would require institutional investors to report energy market positions to the CFTC as other traders must do, even when trades are executed by a third party “swaps” broker.