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* Left-wing party pushes for change to constitution
* Political scrutiny of commodities sector rising
* Industry body GTSA says proposal is misguided
By Emma Farge
GENEVA, Oct 1 (Reuters) - Switzerland is obliged to hold a vote on banning speculation in agricultural commodities after a left wing political initiative gained enough signatures to force it to under Swiss law.
The timing of the national vote is not clear and is pending official guidance from the government. Under the Swiss system, parliament can propose alternative legislation which is typically more moderate and also subject to a national vote.
The sector is worth $20 billion to Switzerland, which has welcomed the world's top trading companies and many international banks to its cantons, but it is unclear how much a popular reaction can rein them in.
German banks like Commerzbank and DekaBank have already cut investment in agriculture after pressure from non-governmental organisations. Rothschild, which has a wealth management business in Switzerland, said it was pulling out of livestock and soft commodities.
Those in the industry played down any possible impact, saying the trade was too international to suffer, and the main commodities-trading exchanges are not Swiss.
Switzerland'a Young Socialist party, which launched the proposal last year, said it had collected more than the 100,000 signatures required in Switzerland for a vote to change the constitution.
The exact size of investment in agricultural commodities from wealth management hub Switzerland is unclear although the proposal, entitled "No Speculation on Food Commodities", would affect companies with a subsidiary in Switzerland, even if their headquarters are elsewhere, according to the proposal.
It would also apply to firms investing in agricultural commodities for themselves or on behalf of clients, it showed.
"We're concerned that prices are moving based on factors that have nothing to do with the real market," David Roth, head of the Young Socialist Party, said on Tuesday.
The Swiss direct democratic system usually has several national referendums a year, meaning that public ire can be translated into strong action.
Some see the proposal's success as the latest indication of Switzerland's growing disquiet about it commodities sector which they say is not subject to enough national regulation.
"The collection of 130,000 signatures in less than a year shows clearly the growing unease of Swiss citizens over business practices in the financial and the commodity sector," said Oliver Classen of Swiss NGO Berne Declaration which campaigns for greater oversight.
Swiss government records show that politicians have submitted more than twenty parliamentary requests on the commodities sector since the start of last year on topics ranging from oil-related corruption scandals in Nigeria to tax planning for commodity traders.
Stephane Graber, secretary general of industry body the Geneva Trading and Shipping Association, said that he did not expect the latest proposal on food speculation to have much impact on Swiss companies.
"We don't see this as really changing anything since the agricultural exchanges are not here in Switzerland," he said at an industry conference last week.
"It's political and done without a good understanding of the functioning of the markets," he added.
Switzerland's Cabinet is also considering a motion for a law on transparency rules that would go beyond those in the U.S. and EU by explicitly targeting unlisted trading houses for the first time.