In late June, the U.S. House of Representatives passed a bill to reauthorize the CFTC, HR 4413, located here (the “2014 CFTC Reauthorization Act”), which includes a number of revisions to the Dodd-Frank Act and CFTC regulations. Most of these proposed changes are an attempt to limit some of the added regulatory burden for various swap end-users. We are beginning a series of posts that will further analyze the 2014 CFTC Reauthorization Act. The remainder of this post will provide a background on the reauthorization process.
Unlike many federal agencies, the CFTC, since its inception, has been authorized with 5 year sunset provisions (however this period often extends to longer than five years). As a result, every five years, Congress must reauthorize the existence of the CFTC. This requirement for reauthorization creates “built-in” opportunity for legislative changes and provides the means for a regular review of the CFTC and the Commodity Exchange Act.
The CFTC was most recently reauthorized in 2008 as part of the 2008 Farm Bill and the CFTC’s statutory authority lapsed in the Fall of 2013 (note that prior to the 2008 reauthorization, the CFTC’s authority had lapsed in 2005, so some delay can occur between a lapse and reauthorization). The 2014 CFTC Reauthorization Act will now be considered by the Senate and will need to be passed by the Senate and signed by the President prior to enactment.