[Congressional Record (Bound Edition), Volume 151 (2005), Part 14]
[Extensions of Remarks]
[Page 19376]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     CFTC'S EXCLUSIVE JURISDICTION

                                 ______
                                 

                           HON. BOB GOODLATTE

                              of virginia

                    in the house of representatives

                        Thursday, July 28, 2005

  Mr. GOODLATTE. Mr. Speaker, as Chairman of the House Agriculture 
Committee and a conferee on the energy bill, I want to make it clear 
that sections 316 and 1281 of the conference report dealing with 
Natural Gas and Electricity Market Transparency are quite important. 
Those provisions clearly affirm the long established legal foundation 
of the Commodity Exchange Act, specifically the exclusive jurisdiction 
of the CFTC over exchanges and trading of futures in this country. I 
applaud the work of the conferees in producing sections 316 and 1281, 
which directs the Federal Energy Regulatory Commission, FERC, and the 
Commodity Futures Trading Commission, CFTC, to complete a memorandum of 
understanding regarding information sharing between the commissions 
within 180 days of enactment, without affecting the exclusive 
jurisdiction of the CFTC with respect to markets under its 
jurisdiction.
  The Conferees recognized that domestic energy markets involve 
activity in both the physical energy markets and in futures markets, 
and that the FERC and the CFTC have important oversight duties in these 
markets, respectively. In order to ensure effective and efficient 
oversight of these markets, the Conferees expect the FERC and the CFTC 
to use the memorandum of understanding as an opportunity to memorialize 
the good information sharing relationship that has developed between 
the two agencies over the past several years. The Conferees expect this 
agreement to accomplish 3 important goals: (1) avoid regulatory 
duplication of information reporting; (2) ensure appropriate protection 
of proprietary business information, including business transactions or 
market positions of any person and trade secrets or names of customer; 
and (3) acknowledge the respective jurisdictions of both agencies in 
order to avoid any jurisdictional overlap. Moreover, the Committee 
expects the memorandum of understanding to insure that in creating an 
effective and efficient means for FERC to secure legitimately needed 
market trading information in the possession of the CFTC, FERC does not 
attempt to secure such information directly from CFTC-regulated futures 
exchanges. This would be contrary to the CFTC's exclusive jurisdiction 
over those futures exchanges and inconsistent with the longstanding 
process followed by all other Federal and State authorities. Sections 
316 and 1281 do not give--and no other provisions of the NGA and FPA 
give--FERC such authority. Rather, these sections specifically intend 
for FERC to get such information but only through submitting its 
requests to CFTC.
  I would further note that FERC will be subject to same restrictions 
on the use of such futures and options trading data information as the 
CFTC. Section 8(e) of the Commodity Exchange Act places restrictions on 
the public disclosure of futures and options trading data, as well as 
other sensitive CFTC information. If the CFTC provides futures and 
options trading data, or other materials identified in section 8, to 
FERC then FERC will be subject to the same restrictions as the CFTC, or 
any other Federal or State Agency which receives such information.
  It is my understanding that the CFTC has a long history of sharing 
futures and options trading data as well as other confidential 
materials from their investigations with FERC and other Federal and 
State agencies who have a legitimate need for such information. Federal 
and State agencies not only recognize the exclusive jurisdiction of the 
CFTC but they also agree that they are subject to the section 8 
restrictions on public disclosure of the information they receive. For 
these reasons it is my view that the MOD between the CFTC and FERC will 
merely formalize well established practices in this area.

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