Cantwell Urges Equal Treatment of Cash and Physical Derivatives

October 17, 2011

Bloomberg – The U.S. Commodity Futures Trading Commission may increase risk of manipulation and volatility in markets for oil, gas and other commodities unless new speculation limits apply similar treatment to physical-settled and cash-settled derivatives, Senator Maria Cantwell said.

Cantwell, a Washington Democrat who supports so-called position limits, made the comment in an Oct. 14 letter to CFTC Chairman Gary Gensler, whose agency is scheduled to vote on Dodd-Frank Act rules to impose the restrictions at a meeting in Washington tomorrow.

In a January proposal, the CFTC supported conditional position limits that would allow larger positions in cash derivatives markets. Chicago-based CME Group Inc. (CME), the world’s biggest futures exchange, objected to the plan’s different treatment of the physical-delivered derivatives market, which it dominates, and the cash-settled market primarily controlled by Atlanta-based IntercontinentalExchange Inc. (ICE)

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