WASHINGTON, DC – U.S. Congressman Austin Scott (GA-08), Chairman of the House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit, today questioned the Commodity Futures Trading Commission (CFTC) Chairman, Timothy Massad, during the House Agriculture Committee’s hearing on the 2015 Agenda for the CFTC and submitted the following statement for the record.

Congressman Austin Scott questioned Chairman Massad on the Commission’s proposed position limits rule and its definition of bona fide hedge transactions as well as the swap dealer de minimis threshold.

Opening Statement of Congressman Austin Scott

Chairman, House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit

RE: 2015 Agenda for CFTC

(Submitted for the Record)

“Mr. Chairman, thank you for convening this hearing. Chairman Massad, thank you for being here today before the House Committee on Agriculture as we review the 2015 agenda for the Commodity Futures Trading Commission.

“In the coming months, this Committee will look to build upon work done in the last Congress to reauthorize the Commodity Exchange Act. As Chairman of the Subcommittee on Commodity Exchanges, Energy, and Credit, I look forward to working with Chairman Massad and the Commission to ensure that our regulatory framework protects the integrity of our markets, but also does not limit the ability of end users to use these tools to conduct their business.

“As we have heard many times in testimony before this Committee, end users, who were not the cause of the financial crisis, are the collateral damage of Dodd-Frank’s reforms. Farmers, ranchers, and other end users depend on markets to manage risk and, thereby, keep consumer costs low. Unfortunately, despite Congressional attempts to shelter them from the Dodd-Frank regulatory regime, too often they have been wrongly swept up into it. Providing relief to the end user community through much-needed clarifications of the law will continue to be my focus on this committee.

“In that vein, an issue to which I’ll be paying particular interest is the CFTC’s definition of a bona fide hedge transaction. The statutory definition states that the reduction of risk inherent to a commercial enterprise is a component in determining what qualifies as a bona fide hedging transaction. Despite clear congressional intent, the CFTC’s proposed position limits rule has limited the definition of a bona fide hedge to a limited set of transactions.

“Unquestionably, this narrow approach to the bona fide hedge exemption will harm end users and pre-empt business risk management decision-making in favor of bureaucratic edict. It is neither desirable nor practicable for the federal government to insert itself in the risk management decisions of American businesses and farmers.  I look forward to continuing the conversation on this and other issues throughout the reauthorization process.

“Chairman Massad, thank you again for your presence here today. I look forward to hearing more about your priorities for the upcoming CEA reauthorization and working with you on the process moving forward.”

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