Magazine article Modern Trader

Merger Efforts, Feinstein Redux. (Washington Report)

Magazine article Modern Trader

Merger Efforts, Feinstein Redux. (Washington Report)

Article excerpt

Despite the two-year chasm between authorizing legislation and the likely launch of trading, some in Congress contend the CFTC and SEC worked so well together on rules for single stock futures that the regulators should be one. Congressman Jim Leach (R-Iowa) is leading this assault on the regulators' independence, only the latest of many such attempts in the past.

The merger would rename the two regulators the Securities and Commodities Exchange Commission. An aide to Leach says this is something the congressman has pushed since 1995.

CFTC Chairman Newsome says the CFTC has been so overloaded with projects that he has not had time to consider the specific proposal. Speaking on the general topic of a merger, though, he isn't supportive.

"I am not aware of any market participants who are anxious for the two agencies to join," Newsome says. "If you look at the two agencies' very different marketplaces and very different regulatory schemes, I don't think anyone is under the impression that it wouldn't be difficult."

CFTC Commissioner Tom Erickson says the separate regulations of the CFTC and SEC recognize the distinct characteristics of the markets they regulate and has fostered growth on both sides.

"[With a merger], the ability to recognize the [unique] characteristics of markets could be lost," Erickson says.

Meanwhile, Senator Diane Feinstein (D-Calif.) reintroduced her amendment that would give the CFTC authority over currently exempted energy markets. …

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