House Agriculture Staffer on CMC Policy Call

A senior staff member of the House Agriculture Committee discussed legislation passed in the House earlier this year on derivatives.  He also briefed CMC members on a recent hearing pertaining to the recent MF Global and PFG Best implosions in the futures industry.  Given the political uncertainties with the upcoming elections , and the fact that Congress is busy in campaign mode rather than legislating, the staff member could not offer a prognosis on what lies ahead for Title VII related legislative fixes in 2012.

CFTC Announcements

The following Proposed Rules has been published:

• 77 FR 50425
  17 CFR Part 39 Clearing Exemption for Swaps Between Certain Affiliated Entities

CFTC Announces Website for Market Participants to Register for CFTC Interim Compliant Identifiers (CICI)

• The Commodity Futures Trading Commission (CFTC) today announced the launch of a website for market participants to register for CFTC Interim Compliant Identifiers (CICI).

CMC Members Discuss Electronic Recording Rule

On CMC’s policy call yesterday, members and staff discussed the salient points of the CFTC’s electronic recording and recordkeeping rule, which is expected to be promulgated in a few weeks.  The rule pertains to futures/swaps transactions and related cash transactions, and applies to all Designated Contract Markets (DCM) members, covering both written and oral communications.  CMC members have strong concerns about the rule, and strategies to educate and advocate the CFTC were discussed.

Potential impacts of RFS waiver focus of Thursday web conference

OAK BROOK, IL Aug. 13, 2012: An analysis of the potential impacts of waiving the federal ethanol mandate will be the subject of a web conference at 10 a.m. CDT Thursday, Aug. 16.

Farm Foundation, NFP is hosting the web conference, which features the work of three Purdue University economists. Advance registration is encouraged.
There is no fee to participate.

Severe drought has reduced corn production and driven up the price of corn. Faced with significantly higher feed costs, livestock producers have asked the U.S. Environmental Protection Agency (EPA) for a partial waiver of the Renewable Fuel Standards, which mandates blending of ethanol in gasoline. Purdue University economists Wally Tyner, Farzad Taheripour and Christopher Hurt have completed an analysis of a potential waiver and what it could mean for the ethanol industry and the price of corn. Their findings will be presented at Thursday’s web conference.

“As was the case in 2008, when rhetoric in the food-versus-fuel debate rose with the prices of corn and oil, the drought and high temperatures of 2012 are pushing corn and soybean prices to record levels, and the food vs. fuel debate is once again heated,” says Farm Foundation, NFP President Neil Conklin. “Now, as then, Farm Foundation and Purdue University are not about fueling these fires. Our shared mission is to be a catalyst for sound public policy by providing objective information to foster deeper understanding of the complex issues before our food and agriculture system today.”

The Purdue economists’ current analysis provides a clear description of the complex economics of corn and ethanol markets, and a rigorous assessment of the implications and uncertainties of changes in U.S. renewable fuels policy. The analysis builds on years of work, including a series of three Farm Foundation publications, “What’s Driving Food Prices,” published in July 2008, March 2009 and July 2011.

Thursday’s web conference is free of charge. Registration prior to the event is encouraged.

For more information, contact:
Mary Thompson, Farm Foundation, NFP, 630-571-9393, mary@farmfoundation.org
Steve Leer, Purdue University, 765-494-8415, sleer@purdue.edu

Farm Foundation, NFP works as a catalyst for sound public policy by providing objective information to foster a deeper understanding of issues shaping the future for agriculture, food systems and rural regions. Farm Foundation does not lobby or advocate. The Foundation has a 79-year commitment to objectivity, fostering the constructive debate that is essential to sound public policy development in a democracy.

###

CFTC Final Rules

The following Final Rules has been published:

• 77 FR 48060
  17 CFR Part 43 Real-Time Public Reporting of Swap Transaction Data; Correction
• 77 FR 48207
  Commodity Futures Trading Commission 17 CFR Part 1 Securities and Exchange Commission 17 CFR Parts 230, 240 and 241 Further Definition of “Swap,” “Security-Based Swap,” and “Security-Based Swap Agreement”; Mixed Swaps; Security-Based Swap Agreement Recordkeeping

CFTC Proposed Rule

The following Proposed Rule has been published:

• 77 FR 47169
  17 CFR Part 50 Clearing Requirement Determination Under Section 2(h) of the CEA

Coalition for Derivatives End-Users News Release

FOR IMMEDIATE RELEASE

August 1, 2012

 

Business Group Praises Bipartisan Introduction of Bill Preventing Costly and Unnecessary Regulation of Main Street Risk Management

Washington – The Coalition for Derivatives End-Users today issued the following statement on the introduction of legislation by Senators Mike Johanns (R-NE), Mike Crapo (R-ID), Jon Tester (D-MT), Herb Kohl (D-WI), Pat Toomey (R-PA) and Kay Hagan (D-NC) to exempt non-financial end-user companies from margin requirements applied to their derivatives trades:

“The bill introduced today by Sens. Johanns, Crapo, Toomey, Tester, Kohl and Hagan helps main street businesses invest more funds in expanding their operations and creating jobs by freeing them from the costly and needless requirements that are threatened by Dodd-Frank Act margin regulations.   The bill is about protecting companies that use derivatives to manage risk, not create it.  The Coalition for Derivatives End-Users, and the hundreds of businesses it represents, applauds this bipartisan legislation and looks forward to Senate action that mirrors its overwhelming passage in the House earlier this year,” said Michael Bopp, Counsel to the Coalition for Derivatives End-Users.

The Coalition for Derivatives End-Users includes the following major U.S. business associations:

• Agricultural Retailers Association
• Business Roundtable
• Commodity Markets Council
• Financial Executives International
• National Association of Corporate Treasurers
• National Association of Manufacturers
• The Real Estate Roundtable

CFTC Staff to Host a Public Roundtable to Discuss Additional Customer Protections

CFTC Staff to Host a Public Roundtable to Discuss Additional Customer Protections

“Commodity Futures Trading Commission (CFTC) today announced that staff will hold a public roundtable on Thursday, August 9, 2012, from 9:30 a.m. to 5:00 p.m., to discuss customer protection requirements for futures commission merchants (FCMs). The objective of the roundtable is to gather public input on a variety of ideas to further protect customers.

Specifically, the discussion will focus on Self-Regulatory Organization (SRO) requirements for examinations of FCMs and CFTC oversight of SRO examination programs, the role of the independent CPA in the examination process, and protection requirements for FCMs, including proposals from the CFTC’s staff and various proposed alternatives to the current system for segregating customer funds….”