By Douwe Miedema
WASHINGTON, July 30 The top U.S. securities
regulator said on Tuesday she was examining insider trading
rules for commodities, further stepping up scrutiny of Wall
Street's role in trading anything from oil to metals.
The move comes after JPMorgan Chase & Co - under
pressure from regulators - said last week it would exit physical
commodities trading, and as Europe is
drastically stepping up its rules for commodity trading.
U.S. Securities and Exchange Commission Chair Mary Jo White
said the agency was looking into whether banks should be allowed
to own such assets as oil tankers and metal warehouses, while
also trading in related commodities.
"It's a subject matter that once it came to my attention,
and that's fairly recently, I've actually asked the staff to
examine that question, or a series of questions," White told the
U.S. Senate Banking Committee in answer to a question by Senator
She also said that "a range of possible disclosures ...
could be involved," but gave no further details.
Other large investment banks such as Goldman Sachs Group Inc
and Morgan Stanley also have been under intense
scrutiny from regulators in recent weeks, with some suspecting
they exert undue influence over commodity markets.
Brown, an Ohio Democrat, has been the most vocal proponent
of the view that banks have an unfair advantage in their trading
operations because they control supply that gives them access to
Last week, big aluminum buyers represented by MillerCoors -
America's second-largest brewer - told him and other senators
that banks' control of metals warehouses drove up the brewers'
costs by as much as $3 billion last year.
Separately, the head of the Senate Agriculture Committee
said on Tuesday that U.S. futures regulators should review
alleged manipulation of the aluminum market.
"I am writing to encourage you to further review this issue
and clarify the role and responsibility of the Commodity Futures
Trading Commission," Sen. Debbie Stabenow wrote in a letter to
Gary Gensler, who heads the CFTC.