WASHINGTON, Jan 19 (Reuters) - The U.S. Commodity Futures Trading Commission last week released its long-awaited proposal to curb speculation in energy futures markets, but several of its top officials expressed reservations that could make it harder for the regulatory agency to finalize its plan.
The measure is the first major regulatory reform for the top U.S. futures market regulator, led by Chairman Gary Gensler. [ID:nN14189109]
Gensler, a Democrat, is one of five CFTC commissioners appointed by the president. [ID:nN14156602] The commissioners have released the plan for public comment, but must vote again for the proposal to become final. [ID:nLDE60E12M]
Here are profiles of the other four commissioners.
A Democrat first appointed to the CFTC in November 2004, Dunn said last week he supported seeking public comment on the position limit plan but had "serious reservations" about it.
Without corresponding changes to over-the-counter regulatory authority and similar undertakings by other nations' regulators, Dunn said he feared the plan could make the energy market less transparent by driving some traders into unregulated markets or overseas to circumvent position limits.
"My vote to release this proposed rule should in no way be construed as an agreement with the opinions expressed in the proposal or to the approach advocated in setting these proposed position limits," he said.
Dunn, a 65-year-old Iowan, chairs the CFTC's agricultural advisory committee, which has been engaged in exploring problems in wheat and cotton futures contracts. [ID:nN11381701]
Dunn previously worked at the Farm Credit Administration and was an agriculture undersecretary during the Clinton era, heading USDA's rural development and agricultural marketing wings. He was active in agricultural credit from the 1970s in the U.S. Midwest.
A Republican and Kansas native, Sommers was the only commissioner to oppose releasing the plan for public comment. Her concerns echoed those of fellow commissioner, Michael Dunn.
"I dissent from issuing the proposal," she said last week. "While I wholeheartedly support efforts to enhance our authority in this area, I am concerned that forging ahead with federal limits in a piecemeal fashion is unwise."
Sommers worked in the commodity futures and options industry for most of her professional life before becoming a commissioner in August 2007. She chairs the CFTC's advisory committee on global markets.
Sommers, 41, worked in the government affairs office of the Chicago Mercantile Exchange and then as policy director for the International Swaps and Derivatives Association before her appointment to CFTC. Prior to that, she worked for two agricultural consulting firms in Washington.
Chilton, known for peppering his speeches with pop culture references, has been a strong proponent of position limits.
"This proposal strikes a reasonable balance," said Chilton, who believes the proposed limits err on the high side. "Simply put, it seeks to impose mandatory hard-cap position limits. Doing so is not the mark of wild-eyed overzealous regulators.
Chilton, 49, was the most vocal CFTC member in calling for financial regulatory reform in early 2009 until Gensler, arguably the CFTC's heavyweight, took office.
A Democrat first appointed in 2007, Chilton helped lead President Barack Obama's transition team for USDA. He was deputy chief of staff for former Agriculture Secretary Dan Glickman during the Clinton era and also worked on Capitol Hill, including as an aide to the Senate majority leader.
O'Malia, a Republican, is a former staffer on Capitol Hill who worked on energy issues. The 42-year-old was confirmed in October 2009.
He said last week the proposed limits could result in less U.S. regulatory oversight and asked if they were even necessary.
"The fact that the proposed position limits are modeled on the agricultural commodities position limits forces us to examine whether those agriculture limits were effective in preventing the price spikes in 2007 and 2008. Despite federal position limits, contracts such as wheat, corn, soybeans, and cotton contracts were not spared record-setting price increases," he said.
O'Malia also spoke against excessive leverage and risky trading practices during a September 2009 hearing. (Sources: CFTC website, Reuters and Senate archives) (Reporting by Washington commodities and energy team; Editing by Walter Bagley)
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