Dianne Feinstein: “this amendment would provide the same transparency and oversight that is provided for every other traded tangible…”

“this amendment would provide the same transparency and oversight that is provided for every other traded tangible commodity. All this amendment says is that electronic exchanges which change energy derivatives are subject to the same requirements as other exchanges, such as the Chicago Mercantile Exchange and the New York Mercantile Exchange. Incidentally, these two organizations support this legislation. Additionally, it says that if you are trading energy derivatives off an exchange, you simply need to keep a record of that transaction; and if it turns out that there is a complaint, the CFTC will have a record to review. The problem, and why we need the legislation: Presently, energy transactions are regulated by the FERC, Federal Energy Regulatory Commission, when there is an actual delivery of an energy commodity. Let me give you an example. If I buy gas from you and you deliver that natural gas to me, FERC has the authority to ensure that this transaction is both transparent and reasonably priced. That is a direct delivery. However, energy transactions have gotten so complex over just the past decade, most energy transactions no longer result in delivery; thus, with these nondelivery trades and transactions, a giant loophole has opened, where there is no oversight and no transparency.”