WASHINGTON The head of the Commodity Futures Trading Commission said the agency will not introduce its long-awaited position limits plan for commodities anytime soon as the futures regulator heard renewed calls from lawmakers pushing it to act over high energy prices.
The Dodd-Frank law gives the CFTC the power to set limits on the positions investors can take to curb excessive speculation "as appropriate" in energy, metals and agricultural markets. The CFTC proposed its plan in January, and since then has received an estimated 12,000 public comments on the measure.
CFTC Chairman Gary Gensler told lawmakers at a Senate Agriculture Committee hearing it would be some time before the agency moves to finalize its position limits plan.
"Nothing would please me more than to be able to calendar that in the next week or two but that's not going to happen," Gensler told reporters after testifying, adding the agency wanted to carefully review the public comments.
"We're going to try to move this as soon as we humanly can," Gensler earlier told the Senate committee.
U.S. lawmakers have turned up the heat on the CFTC to impose position limits as U.S. oil prices hover near $100 a barrel and consumers pay nearly $4 a gallon for gasoline.
A group of U.S. senators introduced legislation on Wednesday to force the CFTC to crack down on speculators.
The bill would require the CFTC to establish within two weeks of the legislation becoming law limits on oil contracts that are equal to the position accountability levels in place at the New York Mercantile Exchange since 2001.
The measure also classifies Goldman Sachs, Morgan Stanley and other Wall Street investment banks that have proprietary oil trading as speculators, instead of bona-fide hedgers.
"There is mounting evidence that the increased price of gasoline has nothing to do with supply and demand and everything to do with Wall Street speculators jacking up oil and gas prices in the energy futures market," said Senator Bernie Sanders who drafted the legislation.
The bill, which is co-sponsored by five other senators, faces a tough time getting the 60 votes necessary in the Senate to block a filibuster of the measure. Similar legislation is expected to be introduced in the House.
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 energy markets.
It could be challenging for the CFTC to finalize its position limits measure. 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.
The CFTC has said it will miss the July 16 deadline for implementing dozens of rules contained in last year's Dodd-Frank legislation, which gave it oversight of the $600 trillion global over-the-counter derivatives market. It proposed on Tuesday a plan that would delay some swap rules that had been set to go into effect on July 16 to ease growing anxiety among traders and fend off possible legal challenges.
Gensler this week laid out a rough roadmap of the agency's rule-making schedule set to begin on July 7. The CFTC, which will spend the remainder of the year finalizing rules, plans to hold votes on anti-manipulation regulations, large trader reporting, agricultural commodity definition and clearing measures in July and early August.
(Editing by Lisa Shumaker)