Commodity Law Rewrite Still Alive
CQ Weekly
December 9, 2000

A deal to revive legislation (H.R. 4541) that would rewrite the nation,s 
commodities laws appeared to be in the works after meetings the week of 
December 4 between representatives of Chicago,s big commodities exchanges and 
the senator who had been blocking the bill.

Representatives of the Chicago Board of Trade and Chicago Mercantile Exchange 
reached a tentative agreement with Senator Phil Gramm, R-Texas, chairman of 
the Banking, Housing and Urban Affairs Committee, on compromise language that 
would reauthorize the Commodity Exchange Act and set new ground rules for the 
trading of a complicated class of investments known as derivatives, 
congressional aides said.

The language was being reviewed by aides to the House Agriculture, Banking 
and Commerce committees, each of which had a hand in drafting the original 
bill, as well as by the Treasury Department.

If there are no objections, the language could be attached to the 
still-pending fiscal 2000 Labor-HHS-Education appropriations bill (H.R. 4577).

The original commodities bill passed the House 377-4, on October 19.

However, Gramm has blocked the measure because of concerns over how it would 
affect the legal status if a type of privately negotiated contracts known as 
swaps.  Swaps, which are used by large corporations to hedge market risk, 
account for a global market worth nearly $90 trillion, according to the Bank 
for International Settlements in Switzerland.

The legislation would keep swaps unregulated.  It would also give the 
commodities exchanges a boost by authorizing the trading of futures contracts 
based on single stocks.

Trading such investments on U.S. exchanges is currently prohibited because 
the Commodity Futures Trading Commission and the Securities and Exchange 
Commission cannot agree on who would regulate the instruments.  The 
legislation would give both agencies regulatory oversight.