WASHINGTON (Reuters) - The futures regulator will miss a mid-January deadline to finalize its long-awaited plan to limit speculative positions held by commodity traders, an agency official said on Wednesday.
“At this point we’re not going to make the deadline,” Jill Sommers, a commissioner at the Commodity Futures Trading Commission, told Reuters. “I don’t see how we make the January deadline.”
Once the CFTC introduces the rule it is required to open it to public comment for at least 30 days, review those comments, determine any revisions, then finalize it.
The regulator has been pushing back the date to propose new speculative limits in energy and metals markets, initially looking at today, and now unlikely make to December 9 and 16 target dates.
It has grappled with how to police and set the controversial limits, part of a broader push by the agency to implement rules to overhaul the $600 trillion over-the-counter swaps market under the Dodd-Frank financial law enacted in July.
Republican Commissioners Scott O‘Malia and Sommers said they would not be surprised to see the position limits proposal introduced in January.
“It’s a tough question and ... we need to get this right,” said O‘Malia. “I haven’t seen a draft from staff and this one takes a long time to do. There’s a lot of nuances.”
The Wall Street reform law gives the CFTC power to impose position limits for all commodities -- not just energy contracts -- and across both exchange-traded and over-the-counter markets. It gave the CFTC 180 days to have the new rule in place for energy and metals markets, and 270 days for limits for agricultural markets.
Gary Gensler, the head of the CFTC, told reporters the agency was looking to propose the rule in December, but he did not rule out it slipping to next month.
In addition to the December 9 and 16 meetings, Gensler said the agency will hold two more meetings in January where it will introduce new proposals.
Additional reporting by Roberta Rampton; Editing by Alden Bentley