Today the Bush Administration is proposing as part of its fiscal year 2003 budget a user fee on commodity futures and options contracts traded on U.S. futures exchanges in order to fund a portion of the regulatory activities of the Commodity Futures Trading Commission. The fee is expected to generate approximately $33 million for the CFTC in 2003.
In light of the current budget situation in Washington, this move was not surprising as policy makers are looking to raise revenues. We have been working in Washington since the Clinton Administration last proposed such a tax in 1995, familiarizing members of Congress with the workings of our markets, the importance of liquidity in maintaining our leadership role in the market, and the competitive pressures we face from easily substitutable exchange and non-exchange marketplaces. No such tax or user fee was proposed since then until today.
We will continue to make these compelling arguments as Congress reviews the President's budget proposal this year. Our strategy will be to portray this proposal as the tax that it is, and our efforts will be intensified to educate the Congress on this misguided concept.
We will keep you informed of details on this proposed user fee on our markets as they become available.
Sincerely,
Nickolas J. Neubauer David J. Vitale
