House panel OKs bill to beef up federal scrutiny of gas market

Washington (Platts)--8Dec2005

The US House Agriculture Committee approved Wednesday a bill to
reauthorize the Commodity Futures Trading Commission and "remedy regulatory
issues (that) have arisen recently regarding futures market volatility and
increasing market prices in natural gas markets," the panel said in a
statement. 

     The provisions related to natural gas were offered in the form of an
amendment by Agriculture Committee Chairman Bob Goodlatte
(Republican-Virginia). The amendment, which seeks to address natural gas price
transparency issues, clarifies surveillance and record keeping authorities by
the CFTC by requiring the commission to prevent and detect manipulation of the
natural gas markets, by increasing record keeping requirements for people who
operate on the exchanges, and by increasing the penalties for violations.

     Specifically, the amendment requires that the CFTC to "conduct
surveillance of the trading in contracts for natural gas" in the event of a
"significant and highly unusual change in the settlement price of any
physically delivered natural gas futures contract traded on a contract
market." The CFTC is to consider, among other things: prices and price
relationship between futures and cash markets; market information, including
supply and demand factors; and large futures and options market positions and
transactions.

     The rule also requires that any person holding, maintaining or
controlling a natural gas futures or options positions maintain records on
position for five years and provide the data to the CFTC upon request.

     Both the amendment and the underlying bill were approved by voice vote.
The bill still needs to be approved by the full House and by the US Senate.

				--Cathy Landry, cathy_landry@platts.com

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