JohnDenver
Light Sweet Crude
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Joined: Aug 29, 2004
Posts: 1844
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 Posted: Wed Jun 11, 2008 8:24 pm Post subject: Speculator legislation update |
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Lots of amusing new laws in the pipeline, thanks to the ongoing pig wallow in commodity markets:
| Quote: | | Nonetheless, several proposals to rein in speculation on commodities markets are circulating in Washington. Representative Bart Stupak (D-Mich.) says he plans to introduce legislation to target speculation through swaps, foreign exchanges, and over-the-counter trades. Last month, Senate Majority Leader Harry Reid (D-Nev.), Senator Jeff Bingaman (D-N.M.), and others unveiled the Consumer-First Energy Act, which would mandate higher cash collateral for energy futures trading and ban traders of U.S. crude oil from routing their transactions through offshore markets. And Representative John Larson (D-Conn.) is expected to propose legislation that would go a step further, effectively banning over-the-counter energy futures trading by those who don't take physical delivery of the commodity. |
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| Quote: | Under scrutiny from lawmakers now are two rules that allow institutional investors to funnel billions of dollars into the crude futures market, far beyond the speculation limits imposed on trading on the New York Mercantile Exchange, owned by Nymex Holdings Inc. (NMX).
Maria Cantwell, D-Wa., Byron Dorgan, D-N.D., and Joseph Lieberman, I-Conn., are authoring legislation very similar to Stupak's Prevent Unfair Manipulation of Prices, or PUMP, Act. Among the proposals, one would subject Nymex's main competitor ICE Futures Europe, a unit of IntercontinentalExchange (ICE), to the same oversight as its New York counterpart. ICE offers contracts to trade crude in the U.S. but has been granted exemptions from the same rules governing the Nymex because it's considered a foreign operator.
The U.S. Commodity Futures Trading Commission, which last week unveiled plans to beef up its own oversight of the markets and disclosed a broad crude-oil investigation, already plans to require more information from dealers of swaps, and obtain details on investment funds using them to track the returns of commodity indexes. |
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