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Message: position limits could be implemented by november

position limits could be implemented by november

posted on Jul 10, 2009 04:48PM

we may finally have the political climate to get the cftc to regulate the markets:

By Christopher Doering - Analysis

WASHINGTON (Reuters) - The Commodity Futures Trading Commission looks eager to move quickly to implement trading limits on commodity and energy futures, leaving opponents little time to argue that the agency is going too far, too fast.

In response to gyrating oil and commodity prices, the CFTC announced this week it was planning to clamp down on big market players by implementing position limits on all commodity futures contracts of limited supply, focusing especially on energy.

The CFTC said it would hold hearings in the next few weeks to get broad public input before embarking on the reforms. Some analysts had suggested the process could be slow and it would be months before anything new was implemented.

But Bart Chilton, a CFTC commissioner, signaled otherwise.

"We're looking at a pretty fast timeline," Chilton told Reuters in an interview.

"We're going to use our authority to the fullest extent possible. That doesn't mean we're going to be draconian or go too far," he vowed.

Chilton is only one of five commissioners and cannot predict what the agency will ultimately do. But he would like new proposals for reform to be issued in September and then implemented by late October or November after a period of public comment.

Currently, the CFTC does not set position limits on oil and other energy contracts, although futures exchanges do. CFTC has position limits on some agricultural contracts.

During the interview, Chilton said he strongly supported looking into position limits for metals, particularly gold and silver.

While some in industry balk at reforms, the CFTC should find broad support in Congress and among farm groups and food companies who complained their traditional hedging practices were upset by big players tossing so much money into futures.

A raft of anti-speculation bills are pending in Congress and the CFTC's actions have been praised by some lawmakers, especially among Democrats.

http://www.reuters.com/article/ousiv/idUSN1052575320090710

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