Looks someone knew what would happen with the Enron loophole
- Thread starter evince
- Start date
Cancel 2016.2
The Almighty
Tell us Desh... Who were Shad and Johnson?
I'll give you a hint... One was at the SEC, the other in charge of the FUTURES market. They fought over who would regulate the single STOCK futures. Because they could not agree, they agreed to BAN them. The repealment of the Shad/Johnson accord has to do with single STOCK futures.
You simpleton.
The ENRON loophole has nothing to do with Shad Johnson other than the fact they were both part of the CFMA bill that Clinton signed in 2000. That is their ONLY connection.
Cancel 2016.2
The Almighty
Oh Desh... are you there?
evince
Truthmatters
I am pleased to appear today to testify on behalf of the
Securities and Exchange Commission ("SEC" or "Commission")
concerning the reauthorization of the Commodity Futures Trading
Commission ("CFTC") and related issues that affect the SEC.
Since the CFTC began operating in 1975, Congress has used
the reauthorization process as an opportunity to comprehensively
review the Commodity Exchange Act and examine the role of the
CFTC. We work closely and cooperatively with the CFTC on an
ongoing basis, and support its rapid reauthorization. Although
we have commented on many issues involving the oversight of
derivatives and remain vitally interested in these issues, I will
focus today on two subjects.
I. Preservation of the Shad-Johnson Jurisdictional Accord
It was just her NUMBER 1 CONCERN on the issue huh?
Securities and Exchange Commission ("SEC" or "Commission")
concerning the reauthorization of the Commodity Futures Trading
Commission ("CFTC") and related issues that affect the SEC.
Since the CFTC began operating in 1975, Congress has used
the reauthorization process as an opportunity to comprehensively
review the Commodity Exchange Act and examine the role of the
CFTC. We work closely and cooperatively with the CFTC on an
ongoing basis, and support its rapid reauthorization. Although
we have commented on many issues involving the oversight of
derivatives and remain vitally interested in these issues, I will
focus today on two subjects.
I. Preservation of the Shad-Johnson Jurisdictional Accord
It was just her NUMBER 1 CONCERN on the issue huh?
Cancel 2016.2
The Almighty
No, you are simply not able to comprehend what she is saying. Her concern lies in the fact that IF single stock futures were allowed AND continued to be under the regulatory authority of the futures market, that insiders could effectively trade on inside information on individual stocks given the different regulations of Futures vs. individual stocks and options. Again, in what she is saying she is absolutely correct.
Your inability to distinguish between stock and commodities is the problem.
Cancel 2016.2
The Almighty
For the love of God.... The Shad Johnson accord was PART of the commodity Exchange Act Desh.... THAT does not mean that Shad Johnson dealt with commodities.
The Shad Johnson Accord deals SPECIFICALLY with EQUITY futures.
Cancel 2016.2
The Almighty
"The Shad-Johnson Accord prohibits futures contracts on individual stocks and narrowly-based stock indexes. A potential concern in repealing the Accord is that these transactions will be subject to manipulation and insider trading abuses. The Committee believes that these concerns are not sufficient to prevent repeal of the Shad-Johnson Accord. Individual stock futures are traded uneventfully in other locales, such as Australia and Hong Kong, without any adverse impact on the securities markets; and the longstanding trading in individual stock options has shown that concerns that derivatives trading in individual stock destabilizes securities markets is unfounded. While manipulation has not been of significant concern in financial contracts generally, the same institutional safeguards used by option markets, such as volume requirements for underlying stocks, can be implemented without difficulty by exchanges for futures on individual stocks. In addition, the contracts can be cash-settled and position limits can be established to further lessen the possibility of market manipulation. With respect to insider trading, regulations applicable to individual stocks can and should be extended to individual stock futures.
The Accord was a political compromise of an interagency jurisdictional dispute that has restricted product competition at investors’ expense. Adoption of the CFTC-SEC agreement, which would extend much of the SEC’s regulatory regime into derivatives regulation on both futures and stock exchanges, including authority to veto futures exchanges’ products, would simply sustain that structure. The Committee views any SEC regulations that affect the competitiveness of stock exchanges compared to futures exchanges, such as transaction fees or margin requirements, as a matter for the SEC to reexamine in conjunction with the stock exchanges’ concerns. But the Committee notes that margin requirements, for example, serve different functions on futures exchanges (where they are a protection against counter-party default) than on securities exchanges (where they are supposed to reduce investor speculation). Therefore, simply applying SEC rules to futures exchanges should not be made a precondition for repealing the prohibitory Accord. "
There, now do either learn about the topic you keep harping on or do us a favor and shut the hell up about it.
The Enron loophole is another topic all together. They were simply a part of the same act.
The Accord was a political compromise of an interagency jurisdictional dispute that has restricted product competition at investors’ expense. Adoption of the CFTC-SEC agreement, which would extend much of the SEC’s regulatory regime into derivatives regulation on both futures and stock exchanges, including authority to veto futures exchanges’ products, would simply sustain that structure. The Committee views any SEC regulations that affect the competitiveness of stock exchanges compared to futures exchanges, such as transaction fees or margin requirements, as a matter for the SEC to reexamine in conjunction with the stock exchanges’ concerns. But the Committee notes that margin requirements, for example, serve different functions on futures exchanges (where they are a protection against counter-party default) than on securities exchanges (where they are supposed to reduce investor speculation). Therefore, simply applying SEC rules to futures exchanges should not be made a precondition for repealing the prohibitory Accord. "
There, now do either learn about the topic you keep harping on or do us a favor and shut the hell up about it.
The Enron loophole is another topic all together. They were simply a part of the same act.
evince
Truthmatters
http://en.wikipedia.org/wiki/Enron_loophole
The "Enron loophole" effectively banned the prohibition on single-stock futures and narrow-based indices that had been in effect since 1982 with the Shad-Johnson Accord, 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.
The "Enron loophole" effectively banned the prohibition on single-stock futures and narrow-based indices that had been in effect since 1982 with the Shad-Johnson Accord, 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.
Last edited:
Cancel 2016.2
The Almighty
The "Enron loophole" exempts most over-the-counter energy trades and trading on electronic energy commodity markets from government regulation. The "loophole" is so-called as it was drafted by Enron lobbyists working with U.S. Senator Phil Gramm to create a deregulated market for their experimental "Enron On-line" initiative."
This portion is correct Desh. The Enron Loophole was created to exempt OTC energy trades from regulation. It had nothing to do with Single Stock futures.
That wiki page is making the same mistake you are. Look at the actual act.... they are both in there, but they are not related.
http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000
Cancel 2016.2
The Almighty
Yes Desh... good for you... you were able to cut and paste that again. But again, look at her comments on Shad Johnson. It has to do with her concerns over insider trading as a result of Shad Johnson being repealed. It has to do with single stock futures and futures on small baskets of stocks.
How fucking dense are you?
evince
Truthmatters
http://seattletimes.nwsource.com/html/nationworld/2008013898_oiltrade24.html
Before 2000, federal regulators limited the number of contracts that commodity traders could enter into as a way to prevent excessive speculation. But the "Enron loophole" — a provision that Congress wrote into the Commodity Futures Modernization Act in 2000 at the urging of the now-defunct energy trader — exempts electronic energy exchanges from most federal regulatory oversight.
jesus SP
Before 2000, federal regulators limited the number of contracts that commodity traders could enter into as a way to prevent excessive speculation. But the "Enron loophole" — a provision that Congress wrote into the Commodity Futures Modernization Act in 2000 at the urging of the now-defunct energy trader — exempts electronic energy exchanges from most federal regulatory oversight.
jesus SP
Last edited:
cawacko
Well-known member
This is a train wreck. One cannot continually cut and paste can they?
Cancel 2016.2
The Almighty
good work Desh.... you found exactly what I told you was there. THEY ARE BOTH IN THE SAME FRIGGIN BILL. BUT THEY ARE NOT RELATED. SHAD JOHNSON HAS NOTHING TO DO WITH THE ENRON LOOPHOLE. THEY ARE SEPERATE ISSUES THAT ARE A PART OF THE SAME BILL YOU STUPID IGNORANT HACK.
Cancel 2016.2
The Almighty
By the way Desh... did you notice that your article above did not mention Shad Johnson once? I wonder why that is???
Cancel 2016.2
The Almighty
That is what happens when she gets on a topic that she doesn't understand.
I can actually understand how anyone who is not familiar with the different types of securities could get confused. But her refusal to learn the differences is amazing.
cawacko
Well-known member
Man, I was trying to follow this and I'm freaking lost. I would believe she understood it if she could actually write something on her own instead of having to cut n' paste everything but she can't.