LAWMAKERS VOW FAIRNESS IN HANDLING FUTURES BILL

LAWMAKERS VOW FAIRNESS IN HANDLING FUTURES BILL

Congressional leaders said here they will be fair-minded in support of legislation affecting the futures industry.

Addressing futures leaders at the Futures Industry Associations conference, Rep. Glenn English, D-Okla., chairman of the House Subcommittee on Conservation, Credit and Rural Development, said he would challenge Congressional attempts to pass off additional costs to the industry in the form of users fees to finance tougher regulation by the Commodity Futures Trading Commission."I would only accept user fees necessary to meet regulatory requirements if we can not find money to bridge the budget gap," Rep. English said.

"We would not agree to reductions in the budget for the CFTC" to avoid new fees, he added.

The CFTC budget is roughly $35 million for fiscal 1990. Service fees to fund administration and enforcement of the CFTC are provided for in Congressional legislation to reauthorize the regulatory agency. The futures industry remains opposed to additional "taxes" on its business.

The Bush administration's budget also calls for a transaction fee of 11 cents a round turn.

Rep. Dan Rostenkowski, D.-Ill., chairman of the House Ways and Means Committee said he would support means of keeping fees low. He said the industry should not be overburdened to the extend of not being competitive in the world.

Rep. English also said he would fight attempts by the Securities and Exchange Commission to take over responsibilities of regulating futures markets.

Although critical last year of the CFTC's ability to regulate the industry following revelations of government investigations into floor-trading practices at Chicago exchanges, Rep. English said the CFTC is a far better regulator than the SEC.

He told reporters that it is the "height of arrogance" to believe the SEC could do a better job than the CFTC. He said the SEC doesn't have nearly the experience in areas like market surveillance and prosecution of market abusers. "If they (the SEC) regulated the industry they would have to hire CFTC people," he said.

Fowler West, CFTC commissioner, who was also critical of the SEC, told futures executives that the more the Senate delays passage of the CFTC reauthorization bill, the more problems it will create for the CFTC and the futures industry.

Commissioner West said that "unless we all pull together, the bill is not likely to move ahead."

If it remains stalled, "ill-thought-out legislative proposals" like a 20 percent minimum margin level for stock index futures or wholesale regulatory restructuring may be written into the law, Mr. Fowler warned.

Treasury Secretary Nicholas Brady and Undersecretary Robert Glauber also have called for higher margin requirements on stock index futures.

Karsten Mahlmann, chairman of the Chicago Board of Trade said increased

margins "threaten the viability of these valuable markets."