By Kevin Drawbaugh and Christopher Doering
WASHINGTON, Oct 9 (Reuters) - The chairman of the U.S. House of Representatives agriculture committee on Friday released a draft bill on regulation of over-the-counter derivatives that differs in some key respects from bills drawn up elsewhere in the House and by the Obama administration.
With another House panel expected to vote next week on similar legislation, Democratic Representative Collin Peterson said his draft attempts 'to reflect the concerns of end users while bringing oversight and transparency to OTC trading.'
The $450 trillion OTC derivatives market is largely unregulated and is widely blamed for amplifying the financial crisis last year that hammered economies worldwide.
President Barack Obama has proposed regulations for the market involving both the Commodity Futures Trading Commission, overseen by Peterson's committee in the House, and the Securities and Exchange Commission, overseen by the financial services committee chaired by Representative Barney Frank.
The two panels have been negotiating for months to find legislation that both can agree on, amid heavy lobbying by major banks that reap huge profits from OTC derivatives and by companies that use them to hedge commercial business risks.
A House agriculture committee aide said the Peterson bill expands on legislation introduced earlier this year by focusing more on regulation of swap participants.
Peterson 'is hopeful that the definition is strong enough that it excludes the commercial end users,' the aide said.
It is important that there is 'a clear line between the commercial end users and the large banks,' he said.
The Peterson bill also says the government cannot impose margin requirements on end users. Under the Treasury proposal and the financial services measure they would have that power.
Peterson's bill addresses excessive speculation in regulated markets by allowing the CFTC to set position limits on future contracts for physically deliverable commodities and redefines eligibility for hedge exemptions and exceeding the limits.
Frank's financial services committee has set a working session beginning on Wednesday for OTC derivatives legislation as part of a broad effort to reform U.S. financial regulation.
House leaders have said they expect a floor vote next month on a broad financial regulation reform bill. The Senate has moved more slowly on the matter. While it may have legislation before year-end, a floor vote may not come until early 2010.
(Editing by Leslie Adler) Keywords: FINANCIAL REGULATION/PETERSON (kevin.drawbaugh@thomsonreuters.com, +1-202-898-8390, +1-202-488-3459 fax) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, Oct 9 (Reuters) - The chairman of the U.S. House of Representatives agriculture committee on Friday released a draft bill on regulation of over-the-counter derivatives that differs in some key respects from bills drawn up elsewhere in the House and by the Obama administration.
With another House panel expected to vote next week on similar legislation, Democratic Representative Collin Peterson said his draft attempts 'to reflect the concerns of end users while bringing oversight and transparency to OTC trading.'
The $450 trillion OTC derivatives market is largely unregulated and is widely blamed for amplifying the financial crisis last year that hammered economies worldwide.
President Barack Obama has proposed regulations for the market involving both the Commodity Futures Trading Commission, overseen by Peterson's committee in the House, and the Securities and Exchange Commission, overseen by the financial services committee chaired by Representative Barney Frank.
The two panels have been negotiating for months to find legislation that both can agree on, amid heavy lobbying by major banks that reap huge profits from OTC derivatives and by companies that use them to hedge commercial business risks.
A House agriculture committee aide said the Peterson bill expands on legislation introduced earlier this year by focusing more on regulation of swap participants.
Peterson 'is hopeful that the definition is strong enough that it excludes the commercial end users,' the aide said.
It is important that there is 'a clear line between the commercial end users and the large banks,' he said.
The Peterson bill also says the government cannot impose margin requirements on end users. Under the Treasury proposal and the financial services measure they would have that power.
Peterson's bill addresses excessive speculation in regulated markets by allowing the CFTC to set position limits on future contracts for physically deliverable commodities and redefines eligibility for hedge exemptions and exceeding the limits.
Frank's financial services committee has set a working session beginning on Wednesday for OTC derivatives legislation as part of a broad effort to reform U.S. financial regulation.
House leaders have said they expect a floor vote next month on a broad financial regulation reform bill. The Senate has moved more slowly on the matter. While it may have legislation before year-end, a floor vote may not come until early 2010.
(Editing by Leslie Adler) Keywords: FINANCIAL REGULATION/PETERSON (kevin.drawbaugh@thomsonreuters.com, +1-202-898-8390, +1-202-488-3459 fax) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2009 AFX News
