Tuesday, June 03, 2008

CFTC to Investigate Markets

The Commodity Futures Trading Commission (CFTC) is preparing to require more information from speculators that may lead to an investigation of why commodity prices have went so high in recent months:

Today the Commodity Futures Trading Commission (CFTC or Commission) announced several policy initiatives aimed at addressing concerns in the agricultural futures markets raised at its April 22nd roundtable in Washington, DC. This roundtable was convened to discuss events affecting the agricultural futures markets – including the lack of convergence between the futures and cash prices, the impact of higher margin requirements, and the role of speculators and commodity index traders.

The agricultural roundtable generated high levels of public interest, with over 2,800 individuals watching the forum over the Internet. This was the first time that the CFTC provided a webcast of a public hearing, resulting in broad public involvement from 38 states and 43 countries ranging from Brazil to the United Kingdom.

CFTC Acting Chairman Walt Lukken and Commissioners Michael Dunn, Jill Sommers and Bart Chilton said:
“During the CFTC’s April 22nd agricultural markets roundtable, the Commission heard from a variety of market participants with various concerns about current conditions in the agricultural futures markets. The Commission is committed to ensuring that our agricultural futures markets function properly in their risk-management and price discovery roles. The Commission recognizes that—although no single solution exists—there are several steps it can take to improve oversight of the futures markets and bring greater transparency and scrutiny to the types of traders in the marketplace, including large index traders.”

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