In the days leading up to the House vote, The National Grain and Feed Association (NGFA) – along with over 30 other organizations – urged “aye” votes. The legislation, the groups said:

  • Enhances reporting, transparency and accountability in futures markets.
  • Allows customers to "claw back" assets from a parent firm in the event of a shortfall of customer funds if there is a futures commission merchant (FCM) insolvency.
  • Creates a clear roadmap for meaningful cost-benefit analysis to be performed by the Commodity Futures Trading Commission (CFTC) before proposing major rules.
  • Provides a solution to the "residual interest" rule approved last fall by CFTC, which would force customers to pre-margin hedge accounts -- thereby putting perhaps twice as much customer money at risk -- dramatically increasing hedging costs, and likely driving farmers, ranchers and small hedgers out of the futures market.
  • Offers relief from technologically infeasible recordkeeping requirements in the cash commodity markets.

On the House floor, Minnesota Rep. Collin Peterson, ranking member of the House Agriculture Committee, admitted he was not thrilled with the bill. However, it “provides some much-needed clarity to end-users, agriculture and energy producers who actually use the derivatives market to hedge against risk and did not cause the financial collapse. Congress never intended for these end-users to be regulated in the same manner as financial entities and H.R. 4413 makes that clear.”