Proposed Transaction Fee on Futures Contracts (CRS Report for Congress)
| Release Date |
Revised April 2, 2007 |
| Report Number |
RS22415 |
| Report Type |
Report |
| Authors |
Mark Jickling, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The Bush Administration has revived a proposal, made by every President sinceRonald Reagan but never enacted by Congress, to impose a user fee on trading in thefutures markets in order to help fund the Commodity Futures Trading Commission(CFTC). Fees paid by other financial market participants already provide funding for theSecurities and Exchange Commission (SEC) and the federal banking regulators. Tofund the CFTC at the level requested for FY2008 would require a fee of about threecents on each futures contract and option traded on the exchanges that the CFTCregulates. The futures industry argues that such a fee would be anticompetitive andcould divert trading to foreign markets or to the unregulated over-the-counter market.However, it is not clear that a fee of this relatively modest size would have a significantimpact on trading decisions in a market where the value of a single contract may rise orfall by hundreds or thousands of dollars in a day. This report summarizes the argumentsfor and against the proposal.
