Transparency in Markets Bill Passes Committee

Bill toughens position limits on futures contracts.

The House Agriculture Committee has approved legislation to increase the transparency and strengthen oversight of futures, options and over-the-counter markets. By voice vote, the Committee approved the Derivatives Markets Transparency and Accountability Act of 2009, a bill sponsored by Committee Chairman Collin Peterson, D-Minn.

Sections of the bill will be referred to the Financial Services, Energy and Commerce and Judiciary committees, Peterson noted, and said that leadership will eventually have to decide whether and how to bring the bill to the floor.

The legislation toughens position limits on futures contracts for physically-deliverable commodities as a way to prevent potential price distortions caused by excessive speculative trading. The bill also imposes a clearing requirement on OTC derivatives contracts and empowers the Commodity Futures Trading Commission with the ability to suspend trading in naked credit default swaps under certain circumstances.

"This bill broadens and improves on last year's bipartisan derivatives legislation," said Peterson. He called on Congress to act quickly and pass a bill that will bring much-needed transparency to derivatives markets.

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