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12-15-00 07:27 PM EST by Dawn Kopecki | Dow Jones Newswires
WASHINGTON -- U.S. investors will now be able to trade futures on individual
stocks and U.S. markets will be able to compete more nimbly with overseas
exchanges now that Congress has taken action on legislation that revamps the
nation's commodities laws.
The House on Friday passed 292-60 the much-anticipated measure, which was
attached to a broad end-of-year spending bill. The Senate simultaneously
passed the bill on a voice vote. President Clinton, who strongly supports
the commodities bill, plans to sign it into law.
The commodities bill is one of the most technical and complex pieces of
legislation to pass through the 106th Congress. It takes a three-pronged
approach to essentially deregulate aspects of the $94 trillion
over-the-counter derivatives industry by excluding those products from U.S.
commodities laws. It also eases futures exchange regulations, giving those
markets more self-regulatory powers, and lifts the 18-year ban on trading
single-stock futures.
U.S. markets have fallen behind overseas rivals that operate under less
burdensome regulations. Already, the London International Financial Futures
& Options Exchange plans to start trading single-stock futures on U.S.
equities in late January.
"Europe is moving ahead with a modern financial structure," Rep. Thomas
Ewing (R., Ill.), said in a telephone interview. Rep. Ewing was the driving
force behind the commodities bill in the House. "Under our current
regulatory system, we are being held back in our ability to be competitive."
Lawmakers have been under intense pressure all year from the Chicago
exchanges, much of Wall Street and the nation's top financial regulators to
pass new commodities laws to keep U.S. markets competitive with
less-regulated overseas rivals.
"This bill will significantly enhance investment opportunities for the U.S.
financial community and reinforce our position as a global financial
center," said Ed Rosen, an attorney for the Ad Hoc Coalition of Commercial
and Investment Banks.
The coalition represents some of the most formidable powers on Wall Street:
Goldman, Sachs & Co., Merrill Lynch & Co., Citigroup Inc., Chase Manhattan
Bank, Credit Suisse First Boston Inc. and Morgan Stanley Dean Witter Inc.
A joint letter signed by Federal Reserve Chairman Alan Greenspan, Treasury
Secretary Lawrence Summers, Securities and Exchange Commission Chairman
Arthur Levitt and Commodity Futures Trading Commission Chairman William
Rainer strongly endorsed the legislation.
"This important legislation will allow the United States to maintain its
competitive position in the over-the-counter derivative markets by providing
legal certainty and promoting innovation, transparency and efficiency in our
financial markets while maintaining appropriate protections for transactions
in non-financial commodities and for small investors," the letter stated.
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