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Saturday March 18, 2:26 pm Eastern Time
Congress likely to debate single stock futures
By Melissa Goldfine
BOCA RATON, Fla, March 18 (Reuters) - Eager to reauthorize the laws
governing U.S. futures trading this year, the chairman of the House
Agriculture Committee said the most difficult issue Congress will likely
debate is the repeal of the Shad-Johnson Accord, which has banned the
trade of futures on single stocks for nearly 20 years.
``Shad-Johnson is probably the most controversial part of reauthorizing
the Commodity Exchange Act,'' said Rep. Tom Ewing of Illinois, one of
six Republicans from the U.S. House of Representatives serving on a
panel at the annual Futures Industry Association conference.
Each time Congress has met to reauthorize the CEA, the futures industry
has unsuccessfully tried to repeal the Shad-Johnson Accord to allow
investors to make highly leveraged bets on stocks through futures
contracts on individual issues.
Those who could face competition from the introduction of futures on
single stocks are concerned over the regulation of the product.
But Chicago Board of Trade President Tom Donovan said current
legislation gives markets outside the U.S. an advantage. ``It's totally
unfair. It's anti-competitive,'' he said.
Ewing said three house committees are in the process of writing a bill
on the CEA issue, and they will likely introduce it in the next few
weeks. The Congress does not have to consider the Commodity Exchange Act
and Shad-Johnson at the same time but will likely do so, said Ewing, who
wants to wrap up the reauthorization before he retires this year.
``I don't believe we should do it piecemeal,'' Ewing told reporters.
``You can either recognize keeping favorable tax treatment for the
unique business you're in, or we can continue to see people going to
London, to Paris, and to the other markets around the globe because of a
financial advantage,'' Rep. Mark Foley, a Florida Republican, told the
audience of futures industry participants..
The all-Republican panel touched upon the upcoming election in the fall,
and the challenge Republicans face in hanging onto their slim majority
in the House of Representatives.
Also mentioned by various panel members was the debate over trade
negotiations and the importance of ``making certain that China goes to
the WTO (World Trade Organization),'' Foley said.
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