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Commodity End-Users Applaud
CFTC Action on Speculation Limits
Coalition also commends outgoing Commissioner Chilton for commitment to reform
EDITOR’S NOTE: The following is a press release issued last month by the NEFI-led Commodity Markets Oversight Coalition. The CMOC
is a non-partisan alliance that represents commodity-dependent American businesses, end-users and consumers. Members rely on functional,
transparent and competitive commodity derivatives markets as a hedging and price discovery tool.
CONTACTS (left to right):
Michael Trunzo, President & CEO:
Jim Collura, NEFI Vice President for Government Affairs:
Mark S. Morgan, Esq., New England Fuel Institute Regulatory Counsel:
WASHINGTON, DC
– A non-partisan
alliance of industry and consumer groups
today praised the Commodity Futures
Trading Commission (CFTC) for moving
forward with a revised rule to limit specu-
lative positions in commodity futures and
swaps.
The Commodity Markets Oversight
Coalition (CMOC) has represented the
interests of
bona fide
end-users of com-
modity derivatives since 2007. The group
applauded today’s approval of a draft rule
to establish individual limits on specula-
tive positions in commodities as required
by Congress under the Dodd-Frank Wall
Street Reform and Consumer Protection
Act of 2010.
“We view position limits as necessary to
combat extreme price volatility and to guard
against potential manipulation of vital U.S.
commodities, from oil to corn,” said Jim
Collura, a spokesman for the coalition.
“Excessive speculation threatens the
welfare of the U.S. economy, harms Amer-
ican consumers and jeopardizes the ability
of hedgers to guard effectively against price
risks,” he said. “Congress clearly under-
stood this when it first authorized position
limits nearly 80 years ago and when it man-
dated them in 2010.”
The CFTC is proposing revisions to an
October 2011 rule to impose position limits
in commodity derivatives such as futures
and swaps. The original position limits rule
was vacated by a District Court Judge in
September of 2012, citing a failure by the
CFTC to resolve perceived statutory ambi-
guities in its final rule. The newly proposed
rule seeks to resolve these ambiguities and
address the Court’s concerns.
When the 2011 rule was published, the
Commodity Markets Oversight Coalition
expressed concern about the efficacy of
the initial limit of 25 percent of deliverable
supply. Once today’s Notice of Proposed
Rulemaking is published in the Federal
Register it will begin a 60-day comment
period in which the CFTC will solicit
input from the public on ways to improve
the rule.
Collura said the coalition will encourage
all member organizations – including
groups that represent farmers, petroleum
marketers, truckers and airlines – to submit
comments.
“Fuel is airlines’ single largest expense,
and it’s also the most volatile. An increase of
just a penny a gallon costs the airlines – and
customers – $180 million,” said David Berg,
General Counsel for Airlines for America, a
founding member of the coalition. “That’s
why it’s so important that this process pro-
duces the strongest possible rule to protect
American businesses and consumers from
unwarranted price spikes.”
“It is very important that this process
produce the strongest possible rule to protect
American businesses and consumers from
unwarranted prices spikes and to restore
confidence in these markets,” he said.
Commissioner Bart Chilton also
announced his retirement today. “The
Commissioner has been a champion of end-
users and consumers,” Collura said. “He
leaves behind a legacy of positive reforms
and will be missed.”
