Looks someone knew what would happen with the Enron loophole

evince

evince

Truthmatters
http://www.sec.gov/news/testimony/testarchive/1999/tsty1399.txt


She pegged it.


TESTIMONY OF

ANNETTE L. NAZARETH, DIRECTOR
DIVISION OF MARKET REGULATION
U.S. SECURITIES AND EXCHANGE COMMISSION

CONCERNING REAUTHORIZATION OF THE COMMODITY FUTURES TRADING
COMMISSION

BEFORE THE SUBCOMMITTEE ON RISK MANAGEMENT, RESEARCH, AND
SPECIALTY CROPS
COMMITTEE ON AGRICULTURE
UNITED STATES HOUSE OF REPRESENTATIVES

MAY 18, 1999






The disparate treatment of insider trading in the futures
arena is another area that raises serious concerns. In contrast
to the broad prohibitions against insider trading found in the
securities laws, the CFTC's regulations contain a narrow
provision that prohibits only a small class of futures industry
insiders from trading on non-public material information.[7]
Therefore, if trading in single stock futures were permitted,
there is a very real risk that illicit profits could be reaped
with impunity in the futures markets by exploiting insider
information. Curbing insider trading helps maintain investors'
strong confidence in the integrity of our securities markets.
This high degree of confidence could deteriorate rapidly if users
of equity-based futures are allowed to freely trade on non-public
information.



She was commenting on the effect of not reupping the Shad -Johnson accord
 
Last edited:
http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000


The CFMA has received criticism for the so-called "Enron Loophole," 7 U.S.C. §2(h)(3) and (g), which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. The "loophole" was drafted by Enron Lobbyists working with senator Phil Gramm [1] seeking a deregulated atmosphere for their new experiment, "Enron On-line"[citation needed].

The legislation was signed by President Bill Clinton in December 2000 to allow for the creation, for U.S. exchanges, of a new kind of derivative security, the single-stock future.

The prohibition on single-stock futures and narrow-based indices that had been in effect until the passage of this act was known as the Shad-Johnson Accord because it was first announced in 1982, as part of a jurisdictional pact between John S.R. Shad, then chairman of the U.S. Securities and Exchange Commission and Phil Johnson, then chairman of the Commodity Futures Trading Commission.
 
I dont see that said in this article?


Why cant you comment on the testimony I have provided here?
 
Desh said:
I dont see that said in this article?


Why cant you comment on the testimony I have provided here?
Click to expand...

So, do you have any clue what a single stock future even is? Very little trading is done with them. You would be hard pressed to find ANY day where they traded more than 50k contracts. Which amounts to nothing. No one likes the damn things. They aren't necessary. Most people simply use the options market for single securities.
 
The reason single stock futures had been previously banned was because they had a turf fight over who was going to regulate them. Now that they are available and used so little, no one gives a shit about them. Single stock futures have NOTHING to do with the speculation in commodities Desh.
 
This review must take into account the major disparities
between securities and futures regulation. The SEC believes that
repealing the Accord in the face of these disparities will work
to the detriment of our capital markets and investors in those
markets. For this reason,
the SEC is opposed to the repeal of the Accord and the trading of
single stock and narrow-based index futures at this time. We
believe the integrity of our securities markets would be
jeopardized if disparities between securities and futures
regulation were used to undermine the securities law provisions
that serve to maintain fair and orderly markets for stocks and
bonds. The Commission is particularly concerned that if futures
on single stocks and narrow-based indexes are traded under the
existing futures regulatory regime, buyers and sellers of such
futures would not be afforded the same protections that are
provided to buyers and sellers of stocks and stock options under
the federal securities laws. For example, margin requirements
are significantly lower, broad statutory prohibitions against
insider trading do not apply, implied private rights of action
for fraud are unavailable, and customer suitability
determinations are not mandatory under existing futures
 
So Super tell me when was the last time congress asked you to testify on such matters due to your expertice?
 
Desh said:
This review must take into account the major disparities
between securities and futures regulation. The SEC believes that
repealing the Accord in the face of these disparities will work
to the detriment of our capital markets and investors in those
markets. For this reason,
the SEC is opposed to the repeal of the Accord and the trading of
single stock and narrow-based index futures at this time. We
believe the integrity of our securities markets would be
jeopardized if disparities between securities and futures
regulation were used to undermine the securities law provisions
that serve to maintain fair and orderly markets for stocks and
bonds. The Commission is particularly concerned that if futures
on single stocks and narrow-based indexes are traded under the
existing futures regulatory regime, buyers and sellers of such
futures would not be afforded the same protections that are
provided to buyers and sellers of stocks and stock options under
the federal securities laws. For example, margin requirements
are significantly lower, broad statutory prohibitions against
insider trading do not apply, implied private rights of action
for fraud are unavailable, and customer suitability
determinations are not mandatory under existing futures
Click to expand...

Again Desh, DO YOU KNOW WHAT A SINGLE STOCK FUTURE IS?

IT HAS NOTHING TO DO WITH COMMODITY FUTURES. IT HAS NOTHING TO DO WITH OIL OR GRAIN ETC....

NOTHING.
 
The Commission is particularly concerned that if futures
on single stocks



The futures exchanges' proposal, in the name of
deregulation, would shift significant authority from the
regulator to market participants. If they prevail in scaling
back the regulatory role of the CFTC, the futures markets will be
free to establish their own rules, including rules governing
trading and listing standards for new products, without receiving
the approval of the CFTC. While the SEC believes that self-
regulation plays an important role in maintaining fair and honest
markets, it should be an adjunct to effective oversight -- not a
substitute.[9]
 
Desh said:
So Super tell me when was the last time congress asked you to testify on such matters due to your expertice?
Click to expand...

LMAO... so someone has to be called before Congress to understand the difference between a single stock future and a futures contract on a commodity?

If you don't know the difference desh, then you should go learn it before acting like you understand what you are reading. But you won't do that, so I will save you the time.

A single stock future is a future contract on a SINGLE STOCK... Like GE for example.

A narrow Index future is on a handful of individual stocks...Like a basket of GE, AT&T, Microsoft, Dell, Apple (usually more than this, but you get the point)

A COMMODITY future is a contract on.... you guessed it... a COMMODITY. Like oil, corn, soy etc...

When they are talking about regulations and concerns over single stock futures, they are NOT talking about the speculation concerns within the current price of oil.
 
SOMEONE?????





ANNETTE L. NAZARETH, DIRECTOR
DIVISION OF MARKET REGULATION
U.S. SECURITIES AND EXCHANGE COMMISSION
 
The futures exchanges' proposal, in the name of
deregulation, would shift significant authority from the
regulator to market participants. If they prevail in scaling
back the regulatory role of the CFTC, the futures markets will be
free to establish their own rules, including rules governing
trading and listing standards for new products, without receiving
the approval of the CFTC. While the SEC believes that self-
regulation plays an important role in maintaining fair and honest
markets, it should be an adjunct to effective oversight -- not a
substitute.[9]


It was a fucking example dude
 
http://www.sec.gov/about/commissioner/nazareth.htm


SEC Biography:
Commissioner Annette L. Nazareth

Annette L. Nazareth was appointed by President George W. Bush to the U.S. Securities and Exchange Commission and sworn in on August 4, 2005.

Prior to being appointed a Commissioner, Ms. Nazareth served as the Commission's Director of the Division of Market Regulation, a position she held from March of 1999 until August of 2005. As Director, Ms. Nazareth had primary responsibility for the supervision and regulation of the U.S. securities markets, principally through the regulation of brokers and dealers, exchanges, clearing agencies, transfer agents and securities information processors. Significant initiatives adopted by the Commission during her tenure include: execution quality disclosure rules, implementation of equities decimal pricing, short sale reforms, implementation of a voluntary regime for consolidated supervision of broker-dealer holding companies and modernization of the national market system rules. She joined the Commission staff in 1998 as Senior Counsel to Chairman Arthur Levitt and served briefly as the Interim Director of the Division of Investment Management.

Since 1999, Ms. Nazareth has served as the Commission's representative on the Financial Stability Forum (FSF). The FSF promotes international financial stability through information exchange and international cooperation in financial supervision and surveillance. The FSF brings together on a regular basis national authorities responsible for financial stability in significant international financial centers.

Prior to joining the Commission staff, Ms. Nazareth held several positions in the financial services industry. As a Managing Director of Smith Barney from 1997 to 1998, she was deputy head of the capital markets legal group. As a Senior Vice President and Senior Counsel of Lehman Brothers, Ms. Nazareth was the chief legal advisor to the fixed income division from 1994 to 1997. From 1986 to 1994, she served as Managing Director and General Counsel of Mabon Securities Corp. and its predecessor business, Mabon, Nugent & Co. She began her career as an associate with the law firm of Davis Polk & Wardwell in 1981, where she worked with commercial banks, investment banks and corporations on mergers and acquisitions, syndicated loans and public and private securities offerings.

Ms. Nazareth was born in Providence, Rhode Island. She received her J.D. from Columbia University School of Law, where she was a Harlan Fiske Stone Scholar and her A.B., magna cum laude and Phi Beta Kappa, from Brown University.

Ms. Nazareth is married to Roger W. Ferguson, Jr. and they have two children.
 
Desh said:
SOMEONE?????





ANNETTE L. NAZARETH, DIRECTOR
DIVISION OF MARKET REGULATION
U.S. SECURITIES AND EXCHANGE COMMISSION
Click to expand...

I was not questioning her expertise Desh. I was questioning your assertation that someone had to be called before Congress in order to know the difference. She (Annette Nazareth) is absolutely correct in her statement.

YOU on the other hand do not understand what it is she is saying in those comments. YOU are confusing stock futures with commodity futures.

The stock futures do not trade in any high volume. One of the exchanges that started trading them already gave up. Very few people traded them.
 
Desh said:
The futures exchanges' proposal, in the name of
deregulation, would shift significant authority from the
regulator to market participants. If they prevail in scaling
back the regulatory role of the CFTC, the futures markets will be
free to establish their own rules, including rules governing
trading and listing standards for new products, without receiving
the approval of the CFTC. While the SEC believes that self-
regulation plays an important role in maintaining fair and honest
markets, it should be an adjunct to effective oversight -- not a
substitute.[9]


It was a fucking example dude
Click to expand...

Again, it was a piss poor example.... DUDE.

OR are you seriously trying to have a conversation on single stock futures? The authority of the commodity futures is not what the above is referrencing. It is AGAIN talking about the single STOCK futures.
 
Superfreak said:
Again, it was a piss poor example.... DUDE.

OR are you seriously trying to have a conversation on single stock futures? The authority of the commodity futures is not what the above is referrencing. It is AGAIN talking about the single STOCK futures.
Click to expand...

I'll admit I know almost nothing about single stock futures and it's quite clear Desh doesn't either. No one knows everything about every subject (except for Darla) so its ok to not know something.
 
cawacko said:
I'll admit I know almost nothing about single stock futures and it's quite clear Desh doesn't either. No one knows everything about every subject (except for Darla) so its ok to not know something.
Click to expand...

Hell, almost no one knows about single stock futures because it was a concept that FAILED. Once the CBOE started offereing more LEAPS it really became a moot point. Which is why so few contracts even trade in the single stock future market. No one gives a shit about them.

The problem is when people like Desh see the word "futures" they naturally assume it has something to do with commodities because THAT is what most people are at least aware of, even if they do not comprehend exactly how a future contract works on commodities.
 
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