On May 18, 2010, the U.S. Senate approved by voice vote an amendment to the financial reform bill (S. 3217, the “Restoring America’s Financial Stability Act”), which would attempt to resolve the ongoing jurisdictional debate between FERC and the Commodity Futures Trading Commission (“CFTC”).
Senator Jeff Bingaman’s (D-NM) amendment would clearly delineate the roles of the agencies and grant CFTC exclusive jurisdiction over swaps and contracts for the sale of a commodity for future delivery (see May 14, 2010 edition of the WER). However, the legislation would preserve the authority of FERC and state regulators over financial transmission rights and other futures-oriented electricity contracts that may fall under the jurisdiction of the CFTC as the sole federal regulator of derivatives. The bill would allow the CFTC to waive authority over futures-oriented contracts now regulated by FERC if it finds that would be in the public interest.
With Bingaman’s amendment, the Senate approved the financial reform bill by a vote of 59-39. The bill now moves to a House-Senate conference where it may face opposition from House leaders.
The bill is available at: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:s.03217:.