Senate kills proposed OTC energy regulation
The US Senate has blocked a measure to re-regulate the trading of over-the-counter (OTC) energy derivatives. Dianne Feinstein, a Democratic Senator from California, had proposed a bill amendment that would permit the Commodity Futures Trading Commission to regulate OTC trading in energy and metals derivatives, in the wake of Enron’s collapse.
Texan Republican Senator Phil Gramm led the opposition to the proposals, with support from Alan Greenspan, chairman of the Federal Reserve, and Paul O'Neill, the US Treasury secretary.
The International Swaps and Derivatives Association, and other trade associations, also urged the Senate to vote against the proposals, noting that Feinstein’s amendments unfairly applied to OTC metals derivatives, which have no connection to either the Enron collapse or the Californian energy crisis.
Feinstein had previously rejected a request from Gramm, the top-ranking Republican on the Senate Banking Committee, to exempt metals derivatives and to drop price-transparency requirements from her proposed reforms.
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