The U.S. Commodity Futures Trading Commission has the three votes necessary to approve limits on speculation in oil, natural gas and other commodities at an Oct. 18 meeting, said a person briefed on the rule-making process.
At the same meeting in Washington, the agency’s five commissioners may vote on rules governing clearinghouses that stand between buyers and sellers in derivatives markets, CFTC Chairman Gary Gensler said in a speech at a Futures Industry Association conference today in Chicago. The agency also may vote to delay until next year regulations originally set to be completed by July 2010.
“We are focusing on considering these rules thoughtfully - - not against a clock,” Gensler said in the speech.
The person briefed on the process spoke on condition of anonymity because the decision-making isn’t public.
The rules will govern trades conducted by Goldman Sachs Group Inc., JPMorgan Chase & Co. and transactions on CME Group Inc., the world’s largest futures exchange, among others.
The so-called position-limits rule to curb speculation will include an analysis estimating that it will cost the financial industry at least $100 million to comply, Scott O’Malia, a CFTC commissioner, told reporters at the conference. The position-limits rule may also come up for a vote on Oct. 18, he said.
The CFTC and Securities and Exchange Commission, which are leading U.S. efforts to write derivatives regulations, also are working on a final rule that will define which Wall Street banks, energy firms and other companies are considered swaps dealers or other major swaps participants. Those definitions will lead companies to have higher capital and margin requirements to limit risk in trades.
The Dodd-Frank Act, the overhaul of financial regulation enacted in 2010, aims to reduce risks and boost transparency after largely unregulated trades helped fuel the 2008 credit crisis.
A requirement to clear swaps may not take effect until the second quarter of 2012, with some smaller participants in the derivatives markets having an additional nine months to comply, Gensler said.