Proposed Rule to Increase Protections for ND Farmers & Elevators


WASHINGTON, D.C. – U.S. Senator Heidi Heitkamp today voiced her strong support for a proposed federal rule that would improve customer protections for farmers, ranchers, and grain merchants, and provide them with opportunities to better succeed through smart investments in futures markets.

Current regulations from the U.S. Commodity Futures Trading Commission (CFTC) require farmers and other customers to fully cover the margin of their futures contracts by close of business the day after a trade. In 2019, this deadline will be moved up and customers will only have until the opening of business the day following a trade, requiring customers to deposit more money up-front by pre-margining their accounts. The new proposed CFTC rule would prevent this second phase from going into effect, providing producers and elevators with an extra full business day to meet their margin calls – the same fix that Heitkamp proposed in a bipartisan bill she introduced last July – which would reduce burdens on farmers and elevators while still increasing consumer protections.

“Making sure farmers and grain elevators in North Dakota and across the country have the economic opportunities they need to succeed enables them to continue to grow and make needed investments in grain, corn, and other products,” said Heitkamp. “Since last summer, I’ve been pushing the CFTC to better protect farmers and ranchers and its new proposed rule takes that commonsense approach by providing more flexibility to customers – just as my bill would do. We need to strike the right balance to help farmers and elevators do their jobs and protect consumers.”

To view Heitkamp’s letter to CFTC Chairman Tim Massad in support of the proposed Residual Interest Deadline for Futures Commission Merchants rule, CLICK HERE.

Heitkamp’s bipartisan Risk Hedging Protection Act would prevent onerous prefunding of margins, a significant cost to customers, while still protecting consumers and helping regulators better recognize trouble in financial firms before it occurs. Heitkamp – a member of the Senate Committee on Agriculture, Nutrition and Forestry as well as the Senate Committee on Banking, Housing and Urban Affairs – has pushed to address the concerns of end users, like farmers and elevators, related to the regulation of futures and swaps markets. Last fall and in December 2013, Heitkamp met with Massad to stress the importance of end user access to important risk mitigation tools offered in the markets regulated by the CFTC.




Source:  U.S. Senator Heitkamp's Office

Posted by Jami Howell

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