Oct 3 Exchange operator CME Group said
on Wednesday it will maintain its existing position limits
regime after the U.S. Commodity Futures Trading Commission's
(CFTC) new rule to curb commodity market speculation was thrown
out by a court.
CME Group had proposed a revision to its own position limits
rules to bring it in line with the changes mandated by the CFTC,
which were due to come into effect on Oct. 12. That rule was
thrown out by the U.S. District Court of Columbia on Friday
following a lengthy challenge by Wall Street banks.
CME Group said that "in light of the action by the District
Court" they were withdrawing plans to revise the exchanges'
"Rule 559", which governs the number of commodity contracts an
individual can hold on the New York Mercantile Exchange, Chicago
Board of Trade, and the Chicago Mercantile Exchange.
"The Exchanges will not be adopting any revisions to Rule 559
at this time, and will continue to consider all requests for
exemptions subject to the existing provisions of Rule 559," CME
Group said in an emailed notice.
CFTC Chairman Gary Gensler vowed on Tuesday to push ahead
with efforts to reinstate the rule, arguing it was mandated by
the Dodd-Frank financial reform law. He did not rule out a
possible appeal to a higher court.
Bart Chilton, one of five CFTC commissioners said Tuesday
that he thought the CFTC should "immediately" appeal against the
court decision and seek a stay so that it could go forward.
It should also start drafting yet another rule to address
the concerns of the court, Chilton said.
U.S. District Judge Robert Wilkins, who was appointed by
President Barack Obama, said the CFTC had failed to prove that
it was necessary to impose new caps on speculative bets in 28
U.S. markets, including copper, corn and crude oil, to reduce
price spikes and volatility.