The U.S. House of Representatives on Tuesday voted to weaken the Commodity Futures Trading Commission's power to regulate swaps overseas and take other steps likely to loosen regulation in derivatives markets, Reuters reported yesterday. The bill, which reauthorizes the agency's mandate, would reverse the CFTC's tough rules on U.S. businesses' swaps with counterparties abroad, requiring it to draw up a new regime together with the Securities and Exchange Commission. In addition, the law would make the agency's staff responsible to the full five-strong commission, not just its chairman, which critics said would slow down decisions. It also subjects all the agency's decisions to cost-benefit analysis, a tool that opponents of regulation have used to defeat rules in court. Small market players like farmers, who use futures to protect revenue from their crops against wild swings in market prices, would be exempted from some of the CFTC's costly new rules aimed at speculators. The House adopted the bill with 265-144 against largely along party lines with Republicans in support.
