* Sen Sanders to propose position limit bill next week
* Bill would force CFTC to curb oil market speculation
* Proposal latest effort to prod CFTC action
By Christopher Doering
WASHINGTON, June 2 An outspoken U.S. senator
who criticized the country's futures regulator for failing to
crackdown on energy speculation said on Thursday he will
introduce legislation next week that will force the agency to
Senator Bernie Sanders said the legislation would force
the head of the U.S. Commodity Futures Trading Commission to
use emergency authority to impose limits on the positions
investors can take in crude oil, gasoline and heating oil. The
move could occur without support from the majority of the
The bill also would raise margin requirements in the
markets and force big Wall Street houses to live within
"We cannot allow Wall Street speculators to continue to rip
off the American people at the gas pump any longer," said
Sanders, an Independent from Vermont.
U.S. lawmakers have turned up the heat on the CFTC to curb
oil speculation by imposing position limits on the number of
contracts big market players can hold in oil and other
Efforts to impose position limits have come as oil prices
hover near $100 a barrel and consumers pay nearly $4 a gallon
for gasoline to fill up their automobiles.
President Barack Obama has blamed speculators for driving
gasoline prices higher, saying there was enough oil in world
markets to meet demand. The administration created a working
group of federal agencies to probe potential fraud in the
Sanders said the CFTC violated the law when it failed to
impose position limits on energy and other commodities by
January, as required under the Dodd-Frank financial reform law.
The Sanders legislation, which was still being drafted,
would increase margin requirements for speculative trading in
crude oil and heating oil to 25 percent.
In addition, it would end all bona-fide hedging exemptions
for bank holding companies including any of their affiliates
and subsidiaries, such as Goldman Sachs (GS.N), Morgan Stanley
(MS.N), JP Morgan Chase (JPM.N), Citigroup (C.N), Bank of
America (BAC.N), and Credit Suisse CSGN.VX.
Gary Gensler, the CFTC chairman, has not said when the
agency would finalize position limits rules.
The Dodd-Frank law passed last July gives the agency the
power to set position limits to curb excessive speculation "as
appropriate" in 28 commodities traded in energy, metals and
But some of the agency's own commissioners are skeptical
the limits would prevent a run-up in prices, and experts and
traders have long said the rules risk making markets more
volatile by reducing liquidity.
(Editing by Lisa Shumaker)