WASHINGTON ?" The Financial Services Committee, chaired by Representative Spencer Bachus, approved legislation yesterday to give regulators additional time to write and review the rules governing derivatives.

H.R. 1573, which was passed along party lines (30-24), would delay, by as much as 15 months, implementation of certain elements of Title VII of the "Wall Street Reform and Consumer Protection Act." Because the Senate has shown very little interest in delay, the measure is unlikely to become law.????

The bill extends the rule writing deadlines on some provisions but leaves Dodd-Frank Title VII reforms intact. The legislation maintains the current timeframe for defining the key terms as well as the rules requiring reporting of all over-the-counter contracts.

PMAA opposes the legislation because it delays implementation of critical reforms to the oil futures market ?" although its potential impact was weakened by amendments adopted yesterday. While the deadline for the Commodity Futures Trading Commission??s (CFTC) proposed rules is July 21, 2011, the deadline is expected to be exceeded for at least several months.

Delaying implementation of Title VII would allow the big banks and hedge funds to continue their dominance in the futures marketplace, compared to end-users who need the market to hedge effectively. PMAA argues that speculators need to reduce their positions in the futures market because they are overwhelming a finite supply of product that was created for hedgers (petroleum marketers, airlines, farmers) who need to use the futures market to plan ahead.

PMAA supports an all-of-the-above approach to reduce oil prices both in the short and long term. Although the bill as amended would not delay imposition of position limits, it would delay imposition of aggregate position limits, which would delay the reduction of excessive speculation. Reduction of excess speculation will lead to the dampening effect on prices at the pump, so any delay is harmful. ????

Notable amendments adopted yesterday include language offered by Representative Scott Garrett (R-NJ) that reduces the maximum delay from 18 months to 15 months and an amendment offered by Stephen Lynch (D-MA) that prevents delay of any authority that SEC and CFTC have to address speculative tiading.

NACS supports PMAA??s efforts on this issue.