Where FERC and the Commodity Futures Trading Commission have overlapping authority, they should craft an agreement that sets boundaries of their roles, he said. Finally, in areas where the agencies agree that FERC should have “primacy,” CFTC should have leeway under the bill to decline to regulate, he added.
“We will be working in the coming days to ensure that a resolution along these lines can be reached before the derivatives bill is brought to the House floor,” Markey said in the statement. Markey chairs the energy and environment subcommittee that held the hearing today.
Markey said he supports derivative market reform but argued there’s a problem with the bill’s expansive definition of “swap” transactions to be regulated by the CFTC.
It would hand CFTC exclusive jurisdiction over so-called Financial Transmission Rights and some other products that FERC now regulates, Markey said.
“FERC could be excluded from regulating the very markets it has created to ensure a reliable and affordable supply of electricity. In FERC’s place would be substituted the CFTC, an agency with no expertise in this area,” Markey said.
FERC Chairman Jon Wellinghoff voiced similar concerns in his testimony submitted to the committee today.