Financial Regulatory Forum

– John Kemp is a Reuters market analyst. The views expressed are his own –

By John Kemp

LONDON, May 24 (Reuters) – With Congress poised to enact sweeping financial reforms next month, attention will switch back to the Commodity Futures Trading Commission (CFTC) proposals to impose tougher position limits on major energy contracts.

The Commission voted in January to put its proposals out for a major 90-day consultation exercise, which ended in late April. Staff are wading through almost 8,000 written comments. The Commission will then have to decide whether and how to reshape the proposal in the light of comments received, before putting it to a final vote.

The Commission’s 4-1 vote to put proposals out to consultation concealed hesitation about whether they should eventually be approved. Only CFTC Chairman Gary Gensler and Democrat Commissioner Bart Chilton gave the proposals full support.

Two other commissioners (Democrat Michael Dunn and Republican Scott O’Malia) voted to release them for consultation but made clear they did not necessarily endorse adoption. The fifth commissioner, Republican Jill Sommers, voted against even releasing the proposal.

By Christopher Doering

WASHINGTON, March 19 (Reuters) – Gary Gensler, who once supported market deregulation blamed for the recent financial meltdown, has been winning over members of Congress who had been skeptical of his ability to rein in Wall Street as the top U.S. futures regulator.

A former partner at Goldman Sachs, Gensler has quickly become a go-to guy for Congress as it navigates a sea of complex proposals to regulate the $300 trillion swaps market.

The biggest test of his influence as chairman of the Commodity Futures Trading Commission will occur next week when key Senate committees hash out landmark derivatives reforms that will go a long way toward steering the future of financial reform in Washington.

WASHINGTON, March 2 (Reuters) – Congress should not create blanket exemptions for end users from new rules designed to make trading of the over-the-counter derivatives more transparent, a commissioner on the top U.S. futures regulator said on Tuesday.

Michael Dunn said the Commodity Futures Trading Commission should be given the authority to exempt end users from requirements to trade and clear standardized derivatives on a case-by-case basis, but recommended against a broader exemption currently being considered by Senate committees.

“Allowing such a large class of transactions to be exempt from clearing would mean that dealers would have more risk on their books. If these dealers fail, this risk could affect the entire financial system,” Dunn said in remarks prepared for a National Futures Association regulatory seminar in Chicago.

By Christopher Doering

WASHINGTON, March 1 (Reuters) – Congress should give U.S. securities and futures regulators the authority to ensure clearinghouses are protected against conflicts of interest, the chairman of the Commodity Futures Trading Commission said on Monday.

Gary Gensler outlined his vision for clearinghouses as two U.S. Senate committees work to finalize financial regulatory reform bills that will include new oversight for over-the-counter derivatives.

“Open governance would ensure that clearinghouses are not governed by parties that might have a conflict of interest or financial stake in particular transactions,” Gensler said in remarks prepared for the Institute of International Bankers.

By Ayesha Rascoe and Tom Doggett

WASHINGTON, Jan 14 (Reuters) – The top U.S. futures market regulator on Thursday moved to limit the role of big traders in once high-flying energy markets, unveiling proposals to put a hard cap on the size of positions that dealers can hold but offering a limited exemption for big financial hedgers.

The long-awaited proposals, part of the Obama

administration’s push to overhaul financial markets, will apply to the four most-traded energy contracts on the two major exchanges, the New York Mercantile Exchange and the IntercontinentalExchange.

But it remains to be seen if the limits — which the Commodity Futures Trading Commision said would affect only the 10 biggest position holders if implemented today — are sufficient to satisfy lawmakers who have clamored for regulatory action since oil prices surged to a record $147 in 2008.

By Joshua Schneyer

NEW YORK, Aug 18 (Reuters) – Deutsche Bank said on Tuesday it has stopped issuing an aggressive oil exchange-traded note as the U.S. government looks to increase regulation in commodities markets. Deutsche said it had temporarily halted issuance of PowerShares DB Crude Oil Double Long Exchange Traded Notes, which allow investors exposure to a rise in crude oil futures.

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