CFTC unveils position limits proposal

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The Commodity Futures Trading Commission (CFTC) is moving forward with regulations meant to cap speculation on a broad array of commodities, including crude oil, natural gas and gasoline.

The agency on Wednesday issued a 530-page notice of proposed rule-making that details the plan to impose position limits capping the number of futures contracts for the commodities that a company might hold in the derivatives market.

The commission’s goal is to keep any single trader from obtaining too large a share of the market, thereby keeping the market fair and competitive.

 The proposal will be published in Thursday’s Federal Register, starting the clock on a 60-day public comment period.

The action comes a month after the commission’s members voted 3-1 to approve the draft regulations.

Recent spikes in prices for the commodities have been blamed on rampant speculation. The 2010 Dodd-Frank Wall Street reform law required the CFTC to implement a new set of standards.

The agency finalized position limit regulations in 2011, only to see them struck down by a federal district court. 

The court ruled that the CFTC had not sufficiently provided rationale for imposing the speculation limits.

 In pushing a revised rule, the commission is dropping its challenge to the court’s 2012 decision.