The House Agriculture Committee and Appropriations Subcommittee reported out reauthorization and budget bills for the Commodity Futures Trading Commission yesterday which were viewed as "victories" for the three-year-old agency.
The appropriations panel approved the commission's total budget request of $15 million for fiscal 1979 plus a supplemental $1.8 million to launch a pilot program of commodity options trading on U.S. exchanges as well as supplemental funds for the period prior to the beginning of the 1979 period on Oct. 1 for the options program. The budget authorization, which still must be approved by the full House and Senate, would permit the commission to incsrease its staff from the current 440 to 500, with 50 to 60 personnel for the registration and enforcement of options trading.
The House Agriculture Committee approved legislation that would reauthorize the commission for three years beginning Sept. 1, permit the president to designate the chairman, strenthen the CFTC's enforcement powers and broaden its subpoena capability, give the states greater con-current investigative and enforcement authority over commodity and commodity options violations, and would permit the agency to "grandfather" exemptions to its broad ban on options trading which is scheduled to begin June 1.
The House, following the lead of the Senate Agriculture Committee, rejected requests by the Securities and Exchange Commission and the Treasury Department for some concurrent authority with the CFTC over the burgeoning financial futures markets. The administration had supported Treasury's request and had recommend that the CFTC be abolished and replaced with an agency headed by a single administrator.
"I'm gratified," said CFTC Chairman William Bagley, late yesterday. "I'd say Congress has recognized that we've performed pretty well for a new agency charged with overseeing an industry unaccustomed to regulation and with our resources unexpectedly diverted by (commodity) options fraud."
Bagley, the four other commissioners and top CFTC staff underwent grueling questioning in more than a score of appearances before four congressional panels during March and April in the first "sunset" review of a federal agency required to win its reauthorization.
"We did stand up to the criticism," he said. "We took it when it was deserved and we beat down some obvious attempts to make inroads on our regulatory authority. I think we've performed very well."
The appropriations panel decision could permit the commission to prepare for exchange trading of commodity options as early as August, Bagley said.
Meanwhile, an attorney for Mocatta Metals Corp. said the company, which is the largest U.S. writer of dealer options in metals such as gold and silver, would petition the CFTC at its meeting today for the exemption for which the House bill provides.