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March 29, 2005 at 07:00 PM
CHICAGO (HedgeWorld.com)–As Congress continues its work to reauthorize the Commodity Futures Trading Commission, the two newest members of the commission said they hope the renewal legislation achieves more regulatory clarity for the trading of securities futures products, along with a more explicit mandate to curb fraud in the over-the-counter foreign exchange markets and a sensible approach to energy issues.
The two commissioners, Fred Hatfield and Michael Dunn, who joined the CFTC in December 2004, shared their perspectives Wednesday with an audience of the Chicago division of the Futures Industry Association.
Mr. Hatfield said he thought the act authorizing the CFTC–one that is revisited by Congress once every five years–”is working well but shouldn’t be put to bed quietly.” Responding to a question from FIA President and panel moderator John Damgard about whether “it is time to send a message to the [Securities and Exchange Commission]” about simplifying regulation of single-stock futures and narrow-based indexes, Mr. Hatfield suggested that the SEC’s dithering and confusion over which agency holds authority had hampered the market for those products.
“It’s ludicrous that the SEC doesn’t have single-stock futures in its pilot program” for regulation of new products, Mr. Hatfield said.
Mr. Dunn said forex fraud is a pressing issue for Congress to consider. “Having seen the number of cases we review appalls me. We need a legislative fix,” he said, with Mr. Hatfield calling for a closing of loopholes in trading regulation.
At a March 3 hearing in Washington, the CFTC’s acting chair, Sharon Brown-Hruska, expressed her concern about fraud in foreign exchange, especially in light of the CFTC vs. Zelener case that cast doubt over the CFTC’s legislative authority to pursue cases.
