A financial reform group is pressing key US House Republicans to enact position limits in commodity markets, despite a court ruling which essentially overturned them.
In a letter sent to four Republicans on the House of Representatives' Committee on Financial Services Thursday, the group wrote that the imposition of position limits "is vital for the proper functioning of the commodities markets," and said the US Commodity Futures Trading Commission was following the intent of Congress when it attempted to put them in place this month.
"Putting aside the court's ruling, we believe there is more than adequate evidence of excessive speculation, and more than adequate evidence that market opacity and excessive speculation have been disruptive to commodity markets and diminished confidence in these markets," the Commodity Markets Oversight Coalition wrote in the letter.
The coalition is a group of commodity end users which includes the American Public Gas Association, Industrial Energy Consumers of America and the Petroleum Marketers Association of America.
On September 28, Judge Robert Wilkins of the US District Court for the District of Columbia threw out the CFTC's position limits rule, ordering it vacated and sent back to the commission. Wilkins ruled that the agency did not prove position limits were necessary to prevent excessive speculation in energy and commodity markets, a threshold he said was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
CFTC Chairman Gary Gensler has said he would support an appeal of the ruling.
In its letter, the coalition called Wilkins' ruling "flawed," but pointed out that it "did not question the CFTC's authority to address excessive speculation."
The letter was sent to four Republicans on the Financial Services Committee, including Chairman Spencer Bachus, an Alabama Republican.
