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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. 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 CFTC needs to be reauthorized every five years, although it has in the past gone for several years without that stamp of approval. The bill aims to improve protection of customers in futures markets, to reform the agency itself and fine-tune changes in the swaps market for those clients who use it to hedge risk, not to speculate.
The Senate is separately working on its own bill to reauthorize the CFTC, and getting a bill through Congress is likely to be a drawn-out process. President Barack Obama's office said it strongly opposed the House bill, which it said undermined the CFTC. The House bill also required the CFTC to carry out a review of metals warehousing and address a years-long controversy after complaints from brewers - which use aluminium for beer cans - about artificially high prices.