Commodity Futures Trading Commission

Some Power Groups Dodge New Financial Requirements

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The Commodity Futures Trading Commission has come under fire for the nuanced lists of exemptions it has offered to various firms and groups as it implements some portions of Dodd Frank legislation that require greater transparency and tighter limits on hedging and trading of the derivatives it oversees.

Included in this group have been certain “natural” players perceived as having an inherent physical position in a relevant commodity and therefore less likely to game the market without regard for fundamental supply and demand or to hold dangerously large positions. Also included as of this week are public power companies and cooperative utilities, which have been exempted from all but the anti-fraud, anti-manipulation and record inspection provisions of the Commodity Exchange Act when it comes to energy transactions. Keep reading →

 /  Published April 2, 2013 at 2:30 PM

Energy Traders Brace for February ‘Swaps’ Report Deadline

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Banks, trading houses and corporations trading energy and related commodities are bracing for one of the most visible financial reform efforts of the last century to finally take effect next month, and are observing the initial impacts on the first sector to be impacted: credit and interest rates.

Rules written by the Commodity Futures Trading Commission since the passage of the Dodd-Frank financial reform legislation require all registered “swap dealers” to register their trades with centralized swap data repositories. The first stage of required reporting kicked in on the final day of 2012 for the notionally huge but comparatively tidy credit and interest rate markets, and is scheduled to start for the equally enormous but potentially more varied and heterogeneous commodity and energy trading markets in February (alongside foreign exchange and equity swaps). Keep reading →

 /  Published January 7, 2013 at 11:00 AM

Congress Girds For A Fight On Oil Trading

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Position limits on energy futures could be here sooner than Wall Street thinks. Legislators are pushing regulators to cap the speculative fervor in crude oil futures as gasoline prices in the U.S. climb higher. While regulators have dragged their heels in pushing this issue forward, election year politics could pressure them to speed up their timetable if gasoline prices continue to rise, catching the big speculators — namely the large U.S. banks — by surprise. The much-maligned Dodd-Frank financial reform act called on regulators, in this case, the Commodity Futures Trading Commission, to impose and enforce position limits to calm volatility in the commodity markets. This would limit the amount of options or futures contracts speculators could hold in a commodity. Many in the industry believe that too much speculation by certain large entities, mainly the big investment firms, have pushed prices up and distorted the market for a whole host of commodities — most importantly, the crude oil market.

 /  Published March 28, 2012 at 12:05 PM
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