In late February, Senator Debbie Stabenow of Michigan, chairman of the Senate Agriculture Committee, kicked off the process required to reauthorize the Commodity Futures Trading Commission Act. In the weeks since, many simmering issues related to commodity futures trading of great importance to grain-based foods have bubbled to the surface.
Comments from the National Grain and Feed Association in connection with the pending reauthorization highlight the importance of protecting customer funds in the event of financial failures by futures commission merchants. The issue was thrust to the fore by the 2011 collapse of MF Global. The N.G.F.A. also expresses concern about rules governing high-frequency traders. Other matters facing the C.F.T.C. include cross-border issues, the role commodity funds play in commodity market volatility and regulation of swaps.
Each of these tough issues facing the C.F.T.C., even one as seemingly straightforward as avoiding a repeat of the MF Global debacle, requires great care to ensure market integrity is protected without creating burdens that impede trading. Ms. Stabenow has pledged to work closely with Thad Cochran of Mississippi, the ranking Republican member of the Agriculture Committee, in an “open and bipartisan” manner. In the polarized Washington environment, such a process would be delightful. C.F.T.C. reauthorization always is something of a high wire act. In 2013, the tightrope looms precariously higher than ever before.