Committee Releases Draft of Derivatives Legislation

The House Committee on Agriculture has issued a draft of the Derivatives Markets Transparency and Accountability Act of 2009, proposed in committee. Though it leaves the Commodities Futures Modernization Act of 2000 in place, among other things, the bill would:

1. subject offshore trading of derivatives to requirements increasing their transparency;
   
   
2. require the CFTC to compel index funds to provide additional public disclosure about the nature of their holdings;
   
   
3. invest in the CFTC the authority to impose more expansive reporting requirements on over-the-counter (OTC) transactions involving commodities;
   
   
4. require that all prospective over-the-counter transactions be settled and cleared through a CFTC-regulated designated clearing organization;
   
   
5. require the CFTC to increase its full-time staff by at least 200;
   
   
6. madate a CFTC study on the OTC markets;
   
   
7. mandate a study by the Comptroller General of the international regime for regulating and trading energy commodities futures; and
   
   
8. forbid naked credit default swaps.

The draft bill is available at: http://agriculture.house.gov/inside/Legislation/111/PETEMN_001_xml.pdf

An outline of the bill is available at: http://agriculture.house.gov/inside/Legislation/111/DMTA_Outline.doc