CFTC Chairman Gary Gensler to testify before the House Committee on Agriculture

Chairman Gensler – Testimony before the House Committee on Agriculture

CFTC Chairman Gary Gensler to testify before the House Committee on Agriculture

Event Date – 03/31/2011

CFTC General Counsel Dan Berkovitz to testify before the US Senate Committee on Agriculture, Nutrition and Forestry

General Counsel Berkovitz – Testimony before the US Senate Committee on Agriculture, Nutrition and Forestry
CFTC General Counsel Dan Berkovitz to testify before the US Senate Committee on Agriculture, Nutrition and Forestry

Event Date – 03/30/2011

Position limits head for showdown in court

(Reuters) Consultation has closed on the Commodity Futures Trading Commission’s latest proposal for position limits. Now the rulemaking process embarks on the final stage, which will probably end up before the U.S. Supreme Court.

The last day of the two-month consultation on Monday witnessed a volley of carefully coordinated submissions from Goldman Sachs, Barclays Capital, Morgan Stanley, the International Swaps and Derivatives Association (ISDA) and a host of others, all urging the CFTC to withdraw the proposed rulemaking.

Many of the objections build upon the criticisms set out at length by the Futures Industry Association (FIA) at the end of last week. The responses help lay the legal paper trail that will be cited when the rule is eventually challenged in the courts. Read more of this post

Australian Exchange Enters Commodities Fray

By GEOFFREY ROGOW

SYDNEY—A new Australian energy-and-commodities exchange is the latest player hoping to lure trade away from venues in Chicago and London toward fast-growing Asian-Pacific economies.

But Financial & Energy Exchange’s bet that Australia’s resource bonanza will buoy its newest commodities exchange when it goes live this year is unlikely to change the landscape of energy trading globally. Read more of this post

CME’s Donohue: Flash Crash Fixes Only Compound Market Issues

By Jacob Bunge

Of DOW JONES NEWSWIRES

CHICAGO -(Dow Jones)- The top executive of CME Group Inc. (CME) warned U.S. regulators that “flash-crash” fixes for the stock market are headed down the wrong path, and that new securities trading rules should be modelled on the futures market.

A lack of coordination between stock and futures exchanges in times of turbulent trading will make it harder for investors to continue doing business and may exacerbate market movements, CME Chief Executive Craig Donohue said.

“One key lesson of the events of May sixth is that closely linked markets should have coordinated halting mechanisms, yet the single security circuit breakers actually undermine that principle and have the potential to exacerbate disruptions across related markets during significant market events,” wrote Donohue in a letter to U.S. securities and derivatives authorities. Read more of this post

Sen. Levin: It’s Time to Curb ‘Excessive Speculation in Commodity Markets’

By Jamila Trindle, WSJ

Sen. Carl Levin (D., Mich.) offered some recommendations to the Commodity Futures Trading Commission: Establish position limits to curb “excessive speculation in the commodity markets” and promote fairer prices.

Mr. Levin’s letter was among more than 5,000 comments on CFTC rules proposed in January aimed at keeping individual traders from holding more than a certain percentage of the market in more than two dozen commodities, including oil.

“Until this proposed rule is adopted and effective position limits are put in place, the American economy will continue to be vulnerable to excessive speculation and the violent price swings it can cause,” Mr. Levin wrote. The CFTC currently sets hard limits only on certain agricultural commodities and lets the exchanges impose restrictions on other products, including oil.

CFTC Chairman Gary Gensler has said the agency probably won’t finalize the rule on position limits until this summer because it has been flooded with comments.

CFTC may propose two key measures in April: O’Malia

By Christopher Doering

(Reuters) – The U.S. futures regulator could propose its two key remaining regulations in late April but will not finalize most of its rules by a July deadline, a commissioner at the agency said on Wednesday.

The U.S. Commodity Futures Trading Commission has proposed the first drafts of most of its rules, but two key regulations remain — a detailed definition of swaps to be covered by its new rules, and the capital and margin needed for swaps dealers and major swaps participants.

Scott O’Malia, a Republican and one of five commissioners at the CFTC, said he expected those rules to be introduced toward the end of next month.

“That could be optimistic,” he told Reuters in an interview.

Officials at the CFTC and the Securities and Exchange Commission, among the agencies engaged in the arduous task of writing hundreds of rules to implement the 2010 Dodd-Frank Wall Street reforms, have said they will miss deadlines from Congress to get many of the new regulations put in place.

CFTC Chairman Gary Gensler said this month the agency hopes to finalize rules in three clusters and may consider phasing in the effective dates of regulations by asset class.

“I think most of them we’re going to miss,” O’Malia said. “It’s not because we’re not trying. Getting it right is more important than getting it done early.”

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