WASHINGTON - A bill that would modernize the Commodities Exchange Act got mixed reviews from regulators testifying on Capitol Hill Wednesday.

At a House Commerce finance subcommittee hearing, Federal Reserve and Treasury officials urged lawmakers to support the Commodities Futures Modernization Act of 2000. However, Securities and Exchange Commission Chairman Arthur Levitt warned that, as written, "the bill presents serious and unwarranted risks to the investing public and our securities markets."

Among other things, it would exempt over-the-counter derivatives transactions from regulation by the Commodity Futures Trading Commission. It would also lift a ban on the trading of futures contracts on individual stocks in the CFTC-regulated commodities market.

This last issue has provoked disagreement between the SEC and the CFTC. The SEC asserts that the bill does not give it sufficient authority over trading in single-stock futures to maintain the investment community's trust in the markets. The CFTC is concerned that giving the SEC any authority over futures trading would put an undue regulatory burden on participants in the commodities markets.

CFTC General Counsel C. Robert Paul, who also testified at the hearing, said the agencies' differences have "led to an apparent impasse but [we] have nonetheless continued to try to reach a resolution."

Lawmakers may well decide for them. The subcommittee is expected to vote on the bill next week, with a vote by the Commerce Committee planned for the week of July 24.

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