Are You Ready To Trade Futures On Microsoft?

**WASHINGTON–Chicago’s futures exchanges are on the brink of a huge
legislative victory that will clear the way for single-stock futures and other
new financial instruments. After 10 hours of negotiations Wednesday between
representatives of the Clinton administration, Congress and the exchanges,
agreement was reached late Wednesday night on a comprehensive futures industry
deregulation bill.

“I’m very happy with it,” said U.S. Rep. Thomas Ewing, R-Pontiac,
noting that the final version of the bill will be introduced Thursday and
attached to an omnibus spending bill that Congress is expected to pass on
Friday. “This will have tremendous impact on keeping us competitive in
the world,” he said.

As chairman of the agriculture subcommittee that oversees the Commodity
Futures Trading Commission (CFTC), the Downstate Republican was a principal
sponsor of the bill, which was considered dead when Senate Banking Committee
Chairman Phil Gramm, R-Texas, raised several last-minute objections before
Congress was scheduled to adjourn for last month’s presidential election.

But the Florida election recount extended the lame-duck session of Congress
and provided more time to work out a compromise. Otherwise, “we would probably have not been able to reach an agreement,” Mr. Ewing said.

Besides single-stock futures, the bill clarifies the legal status of swaps and
other derivative financial products traded over-the-counter by banks. A
last-minute sticking point concerned regulation of equity swaps by the
Securities and Exchange Commission. The bill provides greater certainty that
most swaps will not be regulated by either agency, except in certain
circumstances.

The bill creates a tiered system of regulation, allowing exchanges the freedom
to offer relatively unregulated products to the most sophisticated players in
the market.

“The most important thing for the industry is that it will guide the
development of the business and the futures of innovation,” said Mark
Young, a partner in the Washington, D.C., office of Kirkland & Ellis who
serves as outside counsel for the Chicago Board of Trade. “It gives you a
road map to innovate.”