UPDATE 1-REUTERS SUMMIT-CFTC monitors gov't funds in US commods

(For other news from the Reuters Regulation Summit, click here) (Recasts, lists commodities to invest in, adds funds invest in banks, adds senator's comments)

By Tom Doggett

WASHINGTON, Feb 6 (Reuters) - The top U.S. futures market regulator said on Wednesday it can adequately monitor sovereign wealth funds with billions of dollars to invest to make sure they don't manipulate prices in oil, gold and other commodities.

The state-owned investment funds around the world control some $3 trillion in assets, with commodities offering attractive returns thanks to strong global demand for energy, metals, grains and other natural resources.

The funds have bought heavily into U.S. assets, pumping billions into major commercial banks and investment firms hurt by subprime home loans that went bad.

"They are treated like any other participants in our markets," Commodity Futures Trading Commission Acting Chairman Walter Lukken said of the funds at the Reuters Regulation Summit.

"If they become problematic, our systems are set up to find that out and to take action against it," he said.

Lukken noted that sovereign funds must file information with the CFTC on large trades they carry out on U.S. futures exchanges and the agency can ask them about any suspect trading.

"If they don't want to do it, then they won't participate in our markets," he said.

Lukken said he was "unaware" whether the CFTC has had to ask any of the sovereign funds for more information about their trading activity in U.S. commodities markets.

Lukken said he was not concerned about the funds possibly becoming bigger players in U.S. markets.

"We are concerned how you trade, not who is trading," he said. "It's looking for manipulation. It's looking for fraud."

Lukken said even though sovereign funds "aren't major players in our markets" U.S. regulators should study them.

"Anytime that somebody of a large size can come into a market and move markets around, that concerns us -- whether you're a bank, whether your a sovereign wealth fund," he said. "I think certainly we should think about the risks that they pose to the financial system."

Sen. Charles Schumer, who also spoke at the Reuters summit, said more transparency is needed on how these state-owned funds work and who decides how they invest. (Reporting by Tom Doggett; Editing by David Gregorio)