CFTC's Sommers expects limits plan to move forward
The Commodity Futures Trading Commission likely has enough votes to advance a proposal to limit speculative positions in commodity markets to the next stage, said Jill Sommers, a Republican commissioner, in an interview with Reuters Insider.
On December 16, the CFTC introduced its long-awaited plan to quell speculation for the metals, agriculture and energy markets but postponed a vote on releasing it for public comment because of internal dissent among the five commissioners.
The futures regulator is scheduled to vote on the position limits plan at its public meeting on January 13. At least three of the five CFTC commissioners must vote in favor of issuing the measure for a 60-day comment period. The proposal is expected to mirror the one introduced on December 16, sources say.
I do think that the votes are there to approve the position limits proposal, said Sommers.
A separate vote by the CFTC will be needed to finalize the measure after the public comment period.
The contentious rule is part of the sweeping Dodd-Frank bank reform bill, the biggest financial regulatory overhaul since the Great Depression.
The CFTC needs to write 30 to 40 detailed regulations to implement its share of the law, which gives the CFTC oversight of the over-the-counter derivatives market, valued at $600 trillion globally.
Earlier this week, Bart Chilton -- the most vocal proponent at the CFTC for cracking down on speculators in commodities -- said he had lifted his objections to the plan, paving the way for approval.
The CFTC has conceded it will miss a mid-January deadline to implement position limits that was stipulated in the law.
Last month, the CFTC set out general formulas for calculating limits and applied them to the spot month contract. It suggested waiting until the agency has more swaps data before expanding the limits to all months.
UP NEXT: MORE CHALLENGES
Sommers said the next phase of the CFTC's Dodd-Frank rule-making process -- where it must consider public comments and finalize rules -- will be more challenging for the agency, and commissioners will need more time to absorb the details.
Getting those rules into a place where they are final and they are in a place where everyone is comfortable is going to be hard, she told Reuters.
She also said it will be difficult for the CFTC to implement rules without hiring new staff. The agency has not yet received a 50 percent hike in its budget from Congress that it needs to add staff to its ranks.
Right now, we are using our current staff to not only do their day jobs -- surveilling the market, looking at clearing and intermediaries -- but they're also writing rules, she said.
These people are working day and night to be able to get things done.
Republican lawmakers, who now control the House of Representatives, have said they want to review regulatory expansion plans and slow reforms passed by Democrats last year.
But Democrats who control the Senate will try to make sure regulators get the funding they need, assistant Senate Democratic leader Dick Durbin told reporters on Thursday.
If the Republicans starve the (Securities and Exchange Commission) and CFTC out of the funds they need to properly oversee the activities on Wall Street and other exchanges, it is going to diminish our reputation in the world, he said.
(Additional reporting by Andy Sullivan; Editing by Lisa Shumaker and David Gregorio)
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