CFTC Asks Court to Dismiss Challenge to Futures Position Limits Rule

The U.S. Commodity Futures Trading Commission asked a federal appeals court to dismiss a challenge by two Wall Street groups to its rule that limits commodity speculation, one of the financial industry’s highest-profile efforts to weaken last year’s Dodd-Frank law.

The CFTC filed its request today in the U.S. Court of Appeals in Washington, arguing the appeals court doesn’t have jurisdiction to consider the lawsuit. The agency said that the district court must first consider a challenge to the rule.

The International Swaps and Derivatives Association Inc. and Securities Industry and Financial Markets Association filed lawsuits in two federal courts in Washington last month, arguing that the CFTC used a flawed analysis of Dodd-Frank when it decided to impose the restrictions. The associations also said the CFTC failed to properly weigh the rule’s costs and benefits.

In response to questions from the district court judge, the groups said last month they didn’t oppose putting the district court case on hold while the appeals court considers the challenge.

The case is International Swaps and Derivatives Association v. CFTC, 11-01491, is U.S. Court of Appeals for the District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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