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FUTURES REGULATION LIKELY TO TIGHTEN

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Stronger federal regulation of futures markets is very likely despite delays in pending legislation before Congress, says a member of the Commodity Futures Trading Commission.

CFTC commissioner Fowler West futures exchanges could lose their power to regulate margin levels, the good faith deposits to buy contracts, unless the regulatory agency and the industry heed growing criticism of current margin rules.Historically, futures exchanges such as the Chicago Mercantile Exchange and the Chicago Board of Trade have been allowed a large measure of self-regulation.

But due to the widely publicized trading abuses at the two exchanges, the world's largest, and other problems in recent years, public opinion has now turned against allowing the exchanges to police themselves.

West said industry leaders should not be heartened by the Senate's failure to pass the CFTC's 1989 reauthorization bill before Congress went into recess Nov. 22. Unlike the Securities and Exchange Commission, the CFTC is dependent on reauthorizations from Congress to preserve its regulatory authority.