WASHINGTON (Reuters) - The U.S. Commodity Futures Trading Commission on Monday revised its proposed rules for limiting positions that traders can hold in the commodity markets, dashing expectations that it would finalize the rules by year-end.
The CFTC has been working on the rules since the 2010 Dodd-Frank Wall Street reform law called for limits on futures, options and physical commodity swaps contracts in order to prevent fraud and manipulation. CFTC Chairman Timothy Massad had said he anticipated the commission would finalize them before the end of the year.
Massad, a Democrat, will step aside as chairman once President-elect Donald Trump takes office, to be replaced temporarily by Republican Commissioner J. Christopher Giancarlo.
Massad said the vote would not have been unanimous on approving final rules - indicating Giancarlo would have voted against a rule that he did not wish to implement in coming months.
“I am simply not willing to support a poorly designed and unworkable rule that ever after needs to be adjusted,” Giancarlo said in a statement.
He added the new draft provides the basis for a final rule he could support.
Senate Agriculture Committee Chairman Pat Roberts, a Republican from Kansas, said he appreciated the CFTC did not finalize the rules shortly before President Barack Obama left office - commonly called “midnight rulemaking.”
In 2012 a federal court vacated position-limit rules the CFTC had put in place in a lawsuit brought by securities and derivatives trade groups.
The commission proposed new rules in December 2013. The version released on Monday includes changes made in the intervening years in response to comments, Massad said.
It cuts the number of commodities subject to position limits, tweaks the definition of a bona fide hedge, and changes requirements for trade boards and swap-trading platforms.
Reporting by Lisa Lambert; Editing by James Dalgleish and Matthew Lewis