CFTC approves plans to crackdown on spectators

 
City A.M. Reporter
THE US pushed through its toughest measures yet to curtail speculation in commodity markets in a tight vote yesterday, likely shifting the focus of a fierce four-year debate from the regulators to the courts.

In a measure decried by Wall Street and trading companies as a misguided political attempt to cap soaring oil and grain prices, the Commodity Futures Trading Commission (CFTC) voted 3-2 to approve “position limits” that will cap the number of futures and swaps contracts that a single trader can hold.

The rule, which was being modified until the last minute, offers some relief for the industry, relenting on several provisions, as expected.

The divisiveness was stark from the opening, making a legal challenge more likely. That would be another hurdle for CFTC chair Gary Gensler, who is struggling against Republicans and Wall Street to put in place rules required by recent financial reforms.