Commodity Markets Transparency and Accountability Act of 2008

Floor Speech

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Mr. VAN HOLLEN. Mr. Speaker, I rise in strong support of this legislation that will bring greater transparency and greater accountability to the commodity futures markets, and I want to commend committee Chairman Peterson, Ranking Member Goodlatte, and subcommittee Chairman Bob Etheridge for coming together with the committee and others to pass and develop this bipartisan legislation which I hope we will all pass. I also want to thank and commend Rosa DeLauro, John Larson, and Bart Stupak for their leadership on this issue.

If there is one thing we should have all learned over the last couple weeks given the turmoil in our financial markets, it is that we need greater transparency and greater accountability. These are not just abstract good government ideals, these are tools that people need for responsible regulation of our financial markets, including our futures markets. They are absolutely necessary if we want to make sure that the CFTC and our regulators have the information that they need, especially when you are talking about the great impact that these things can have on our economy, as we are seeing every day on Wall Street.

The old adage that "what you don't know won't hurt you'' is no longer a tenable position for this Congress. We need the information. With this legislation, for the first time, we will shine a light on the so-called dark markets and empower the CFTC to take corrective action where they find problems.

It provides for stronger position limits for energy commodities traded on regulated exchanges while ensuring that our futures markets continue to have the liquidity they need to function properly. No one has said there is not an important role for our futures markets, it is making sure that they are regulated properly to protect consumers and investors.

This bill will also rein in excessive speculation by ensuring that hedging exemptions are granted only to commercial market participants seeking to hedge their actual physical risk, rather than to speculators facing only financial risk.

Mr. Moran mentioned the recent report by the CFTC, and I would point out there was a recommendation they made which really follows a provision that we make in this bill, and that is to make sure that we, with respect to the commodity swap dealers and index traders, that we remove the swap dealers from the commercial category of market participants. We do that in this bill.

Additionally, in recognition of the numerous instances where the same CFTC staff report found traders effectively circumventing position limits they would ordinarily face on regulated exchanges by going to the over-the-counter market, in some cases exceeding those established positions by substantial amounts, the CFTC report proposes requiring swap dealers to certify that they are noncommercial clients that do not exceed established position limits with their over-the-counter trades. We do that here.

Mr. Speaker, we have a fundamental choice here. It is a choice between transparency and keeping things hidden behind the curtain. It is a choice between whether we want our futures markets to reflect the fundamentals of supply and demand, or whether we want our futures markets to be continuously whipsawed by massive in-flows of speculative money.

We have a job to do. We have seen in recent days and weeks on Wall Street the effects of taking our eye off the ball and not providing regulators with the tools they need and them not following through with what they have. Let's make sure that we don't make that mistake in the commodities futures trading market. We have already seen the impact of not giving those complete tools. Let's make sure that those folks have what they need and are empowered to do the job on behalf of the American public. I thank the committee for their work on this.

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