Commodity Speculators May Face New Limits

The top U.S. derivatives regulator is slated to vote today whether to curb trading in oil, wheat, gold and other commodities after a boom in raw-materials speculation, record-high prices and years of debate and delay. The rule has been among the most controversial provisions of the Dodd-Frank financial overhaul, enacted last year, which gave the Commodity Futures Trading Commission the authority to limit trading in over-the-counter commodity swaps as well as exchange-traded futures. The proposal would limit the number of contracts a single firm can hold. “This is a very important rule for the futures and derivatives industry,” Paul Pantano, a Washington-based partner at New York law firm Cadwalader Wickersham & Taft LLP, said yesterday in a telephone interview. The legislation gave the commission jurisdiction over the estimated $300 trillion U.S. derivatives market, and the CFTC has proposed more than 50 rules.

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