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Bart Chilton Can Solve CFTC Funding, High-Frequency Trading Problem In One Fell Swoop

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If Congress won't act to curb derivatives speculation (and fund his own agency) with a transaction fee, Bart Chilton will.

Commodity Futures Trading Commission member Bart Chilton plans Wednesday to propose a transaction fee for derivatives markets, an idea that has been floated for years but has never gained traction in Congress….

“Heck, who’da thunk five years ago that a hoax Twitter feed would lead to another market meltdown moment,” Chilton plans to say Wednesday, according to a prepared copy of his speech to the Energy Bar Association.

A fee of $0.0006 per transaction could raise as much as $300 million a year, which would cover the CFTC’s budget and serve as a disincentive to high-speed traders, Chilton said. The fee wouldn’t apply to hedgers using the markets to lay-off commercial risk, he said.

“If you’re using our markets like a slot machine, you’re gonna contribute to the oversight and enforcement services that need to be part and parcel to markets,” Chilton said.

CFTC Commissioner Proposes Derivatives Transaction Fee [WSJ MoneyBeat blog]
U.S. regulator seeks tax for fast-speed traders [Reuters]