The agency administers the Commodity Exchange Act (CEA), which was passed in 1936. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) significantly expanded the CFTC's jurisdiction to include over-the-counter (OTC) derivatives, also called swaps. The CFTC Reauthorization Process

The CFTC was last reauthorized in 2008 as part of the Food, Conservation, and Energy Act ( P.L. 110-246 ), which included authorization of appropriations through FY2013. Although the underlying authority in the statute to administer programs does not have an explicit expiration, the authorization of appropriations only applied through FY2013. As a consequence, the authorization of appropriations assumes Congress will periodically act to authorize future appropriations. It has not been uncommon, however, for Congress to continue to fund the CFTC for several years beyond the expiration of previous authorizations of appropriations. 238 , the Commodity End-User Relief Act, which was passed by the House on January 12, 2017, and referred to the Senate Committee on Agriculture, Nutrition, and Forestry on January 17, 2017. 238 shares substantial similarities with the 114 th Congress CFTC reauthorization bill, H.R. 2289 , that the House passed, but differs in some respects from the Senate Agriculture Committee reauthorization bill, S. 2917 , which did not see Senate floor action in the 114 th Congress. Historically, the reauthorization process often has been one of the principal vehicles for modifying the CFTC's regulatory authority and evaluating the efficacy of its regulatory programs. The current CFTC reauthorization process is the first since the Dodd-Frank Act's passage brought the more than $400 trillion U.S. swaps market under regulatory oversight. 238 would authorize to be appropriated $250 million per year for each of FY2017 through FY2021 for the CFTC. The section currently authorizes the appropriation of "such sums as are necessary to carry out" the chapter of the CEA "through 2013." Both H.R. H.R. For FY2017, the Obama Administration requested $330 million. 238 would expand the CEA's current 5 cost-benefit analysis provisions listed above to 12 considerations. In addition, Section 202 would add a requirement that the CFTC conduct quantitative as well as qualitative assessments of costs and benefits. The requirement for quantitative cost-benefit analysis appears to mark a change from previous practice. 238 would modify the definition of a financial entity, potentially enabling a wider range of companies to claim the end-user exception to the clearing requirement in the Dodd-Frank Act. 238 would make changes to the definition of bona fide hedging in the CEA, discussed below, in a way that is substantially similar to the CFTC reauthorization bills passed by the House and reported by the Senate Agriculture Committee in the 114 th Congress ( H.R. 238 would mandate that, starting 18 months from its enactment, the swaps regulatory requirements of the eight largest foreign swaps markets must be considered comparable to those of the United States —unless the CFTC issues a rule or order finding that any of those foreign jurisdictions' requirements are not comparable to or as comprehensive as those of the United States.
The Commodity Futures Trading Commission (CFTC), created in 1974, regulates futures, most options, and swaps markets. The CFTC administers the Commodity Exchange Act (CEA; P.L. 74-765, 7 U.S.C. §§1 et seq.), enacted in 1936, to monitor trading in certain derivatives markets. The CFTC was last reauthorized in 2008 as part of the Food, Conservation, and Energy Act (P.L. 110-246), which included authorization of appropriations through FY2013. Although the underlying authority in the statute to administer programs does not have an explicit expiration, the authorization of appropriations only applied through FY2013. As a consequence, the authorization of appropriations assumes Congress will periodically act to authorize future appropriations. It has not been uncommon, however, for Congress to continue to fund the CFTC for several years beyond the expiration of previous authorizations of appropriations.
The current CFTC reauthorization process is the first since the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act; P.L. 111-203) brought the roughly $400 trillion U.S. swaps market under regulatory oversight. Historically, the reauthorization process has often been one of the principal vehicles for modifying the CFTC's regulatory authority and evaluating the efficacy of its regulatory programs.
In the 115th Congress, a CFTC reauthorization bill—H.R. 238, the Commodity End-User Relief Act—that also would make changes to the CEA passed the House on January 12, 2017, and was referred to the Senate Committee on Agriculture, Nutrition, and Forestry on January 17, 2017. H.R. 238 shares substantial similarities with the 114th Congress CFTC reauthorization bill, H.R. 2289, that the House passed, but differs in some respects from the Senate Agriculture Committee reauthorization bill, S. 2917, which did not see Senate floor action in the 114th Congress.
This report examines selected major H.R. 238 provisions that would
authorize appropriations for the CFTC of $250 million for each of FY2017 through FY2021. Both prior reauthorization bills introduced in the 114th Congress would have authorized "such sums as are necessary" to carry out the CEA, rather than a specific amount. The CFTC requested $330 million for FY2017 and received $250 million. expand the current 5 cost-benefit analysis provisions in the CEA to 12 considerations. It would add a requirement that the CFTC conduct quantitative as well as qualitative assessments, which appears to mark a change from previous practice. modify the definition of a financial entity, potentially enabling a wider range of companies to claim certain exemptions from the Dodd-Frank derivatives requirements. potentially broaden the bona fide hedging definition to allow anticipated, as well as current, risks to be hedged, which might increase the number of swaps that qualify as hedges. Bona fide hedging is often used to determine which swaps count toward registration requirements, position limits, large trader reporting, and other regulatory requirements. mandate that, starting 18 months from enactment, the regulatory requirements of the eight largest foreign swaps markets be considered comparable to those of the United States—unless the CFTC issued a rule finding that any of those foreign jurisdictions' requirements were not comparable to U.S. requirements.