Legislative Activity

House to Vote on CFTC Reauthorization Bill

This week, the House of Representatives is expected to take up H.R 4413, a bill that would reauthorize the Commodity Futures Trading Commission (CFTC) through September 2018. On June 13, House Rules Committee Chairman Pete Sessions(R-TX) asked Members to submit any amendments by Tuesday, June 15. The House bill would make several changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), including providing certain exemptions for end users, as well as making revisions to the CFTC’s cross-border rules. While the Senate Agriculture Committee has yet to unveil its CFTC reauthorization bill, it is unlikely that the bill will include major changes to the Dodd-Frank Act.

Senate Confirms Federal Reserve Nominees, To Begin Consideration of New HUD Nominee

On June 12, the Senate voted 61-31 to confirm Lael Brainard as a Governor of the Federal Reserve, and voted 67-24 to confirm Jerome Powell for a second term as a Governor. The Senate also voted 63-24 to confirm Stanley Fischer as Vice-Chairman of the Federal Reserve. Additionally, on Tuesday, June 17, the Senate Banking Committee will hold a hearing on the nomination of the Honorable Julian Castro to replace the Honorable Shaun Donovan as the next Secretary of the Department of Housing and Urban Development. Also of note, last week Treasury Secretary Miller announced that she would be stepping down in September.

House to Move Forward with TRIA Bill

On June 11, Representative Randy Neugebauer (R-TX), Chairman of the House Financial Services Subcommittee on Housing and Insurance, released the text of his Terrorism Risk Insurance Act (TRIA) reauthorization bill, which he is expected to introduce this week.  The bill reauthorizes TRIA for five years and would phase in changes aimed at reducing the government’s role in the terrorism risk insurance market. According to Representative Neugebauer, the House Financial Services Committee plans to vote on the legislation before July 4.

This Week’s Hearings:

  • Tuesday, June 17: The Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations will hold a hearing titled, “Conflicts of Interest, Investor Loss of Confidence, and High Speed Trading in U.S. Stock Markets.”
  • Wednesday, June 18: The House Financial Services Committee will hold a hearing titled, “The Semi-Annual Report of the Consumer Financial Protection Bureau.”
  • Wednesday, June 18: The House Financial Services Subcommittee on Oversight and Investigations will hold a hearing titled, “Allegations of Discrimination and Retaliation within the Consumer Financial Protection Bureau, Part III.”
  • Wednesday, June 18: The Senate Banking Subcommittee on Securities, Insurances, and Investment will hold a hearing titled, “High-Frequency Trading’s Impact on the Economy.

Regulatory Activity

CFTC to Hold Roundtable on Position Limits for Physical Commodity Derivatives

On Thursday, June 18, the CFTC will hold a public roundtable to discuss position limits for physical commodity derivatives. The roundtable will focus on hedges of a physical commodity by a commercial enterprise, including gross hedging, cross-commodity hedging, anticipatory hedging, and the process for obtaining a non-enumerated exemption. Specifically, the roundtable will discuss the setting of spot month limits in physical-delivery and cash-settled contracts and a conditional spot-month limit exemption. Further, the roundtable will discuss aggregation of positions based on ownership interests of greater than 50 percent of an owned entity and aggregation based on substantially identical trading strategies.