House Ag holds hearing on trading margined products
The House Agriculture Committee today held a hearing on FTX’s proposal to trade margined products under a non-intermediated clearing model.
In an opening statement, House Agriculture Committee Chairman David Scott, D-Ga., said, “I have heard a number of concerns about the risks of their proposed model, and I believe that we must take great caution to preserve and protect our financial system, the protections, and the international standing it affords our market participants. That is why I have brought people representing a variety of interests and perspectives here together today to ensure that we are giving this conversation the appropriate amount of attention and that all of the voices are being heard.”
Rep. Glenn “GT” Thompson, R-Pa., ranking member on the committee, who has sometimes said Scott has not been collaborative in setting up hearings, said at the beginning of his opening statement, “I want to acknowledge your efforts to work collaboratively with me on this hearing. I especially appreciate that today’s table is a bipartisan witness table. It will be a better hearing because of our work together.”
Thompson said, “This proposal has generated excitement, concern, hope, and confusion across the derivatives and crypto industries. As I have said in the past, I believe this proposal is worthy of balanced consideration.”
Thompson said he knows that the Commodity Futures Trading Commission, which the committee oversees, “is working diligently to consider it.” Thompson also noted that CFTC Chairman Rostin Behnam “committed to us that the commission will consider the proposal publicly, according to the core principles for a derivatives clearing organization. Chairman Benham also committed to a comment period, which closed yesterday, and to hold a public roundtable, which will take place at the end of this month.”
Thompson said he does not believe the committee “should duplicate that work. We have empowered the commission, ensured stakeholders and the public have a seat at the table, and now we must trust the process. Where the commission fails to consider the proposal appropriately, deviates from the law, or unnecessarily limits debate, we should not hesitate to weigh in. But that has not happened.”
Former House Agriculture Committee Chairman Rep. Frank Lucas, R-Okla., and 80 of his colleagues last week introduced the Protect Farmers from the SEC Act.
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