January 5, 2011

CFTC’s Chilton: Reluctant To Support Position Limit Proposal So Far

News Article

Bart Chilton, the outspoken CFTC commissioner, said Tuesday he is reluctant to support the CFTC's issuance of a proposal on position limits because what has been suggested so far has not met the congressionally mandated implementation schedule. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFTC was supposed to have a final rule by mid-January on what kind of limits traders would have in the agricultural, energy and metals markets.

Last month the CFTC said it would miss that target. On December 16, the CFTC introduced its plan to curb speculation in metals, agriculture and energy markets, but Chairman Gary Gensler abruptly postponed a vote on the proposal.

Commissioner Bart Chilton, the most vocal proponent of cracking down on speculators, was key to the postponement as would have voted against the plan. It would have included a two-step approach to allow more time for the agency to gather information on the opaque swaps market.

Chilton said in a prepared statement Tuesday that he wanted to reiterate that since there is not support on the CFTC to implement the position limits on time, the agency should seek to put in place an interim position "points" system. This is the best the agency can do right now, given the lack of CFTC support for moving forward on actual position limits, he added.

Position points are not speculative position limits, he said, but instead these points would be a "red flag" for the CFTC to get more data and would allow for a determination of a trader's net-position size."


Kitco News


January 4, 2011

Cross References (links require a Cabinet subscription)

Dodd-Frank Act, Title VII, Sec. 737

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