Bloomberg News

Futures and Swaps Fees Should Pay for CFTC Budget, Chilton Says

February 15, 2012

Feb. 13 (Bloomberg) -- U.S. Commodity Futures Trading Commission member Bart Chilton said supporters of user fees to fund the agency’s oversight of swaps and futures markets should offer suggestions for how they could be imposed.

President Barack Obama’s budget request for the main U.S. derivatives regulator would provide $308 million for the 2013 fiscal year, 50 percent more than was approved for the current 12-month period. The proposal released today backed user fees as a way to boost revenue without saying how they would be set.

“Those of us who support user fees have an obligation to suggest how such a funding mechanism might work,” Chilton, one of three Democrats on the five-member commission, said in an e- mail. “The fear of the unknown with regard to fees has, in my opinion, retarded serious movement forward.”

Fees should be imposed on swaps and futures and shouldn’t be tied to the number of transactions, Chilton said.

“In the swaps space there are many fewer transactions, but at larger volumes than occur” on regulated exchanges, he said. “Some type of formula must be developed to accommodate this difference, to fairly apportion fees across both markets.”

The CME Group Inc., the world’s largest futures exchange, has opposed user fees, which were initially proposed by the Obama administration in last year’s budget proposal.

--Editors: Gregory Mott, Maura Reynolds

To contact the reporter on this story: Silla Brush in Washington at sbrush@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net


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