September 19, 2008 / 4:02 PM / in 9 years

UPDATE-1-ICE says US anti-speculation bill goes "too far"

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LONDON, Sept 19 (Reuters) - A U.S. bill to curb speculation in the oil markets could be too restrictive and reduce liquidity, a spokeswoman for the IntercontinentalExchange (ICE.N) said on Friday.

“We think that the house bill goes too far in terms of restricting trading activity, reducing liquidity and weakening price discovery,” spokeswoman Sarah Stashak said.

On Thursday, the U.S. House of Representatives passed a bill aimed at preventing excessive speculation in oil, which included measures that would affect exchanges outside the United States.

The ICE Futures Exchange, owned by the InterncontinentalExchange, is regulated by Britain’s Financial Services Authority.

U.S. politicians have launched a whole raft of bills aimed at reining in speculation in the oil markets. Many of them blame speculators for driving oil to record peaks this year of nearly $150 a barrel.

However, a report from the U.S. Commodities Futures Trading Commission in July found that rising oil prices were largely due to fundamental supply and demand factors.

The U.S. House bill would require foreign derivatives exchanges to adopt reporting standards and position limits similar to those already in the United States.

    These requirements include providing information on traders’ positions in the market -- so-called commitments of traders.

    “The additional requirements placed on foreign (exchanges) are redundant and unnecessary,” spokeswoman Stashak said. “ICE has already signalled its intent to comply with U.S.-style futures regulations for its WTI (U.S. crude oil) contract.”

    The U.S. futures market regulator earlier this year extended its reporting rules to the ICE’s U.S. crude oil contract.

    The ICE is ready to begin implementing these requirements in October, Stashak said.

    The U.S. House bill would only apply to the ICE’s U.S. crude oil contract and would not affect the ICE’s Brent crude oil, gasoil, European emissions, British natural gas and power contracts, she said.

    Reporting by Jane Merriman; editing by Karen Foster

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