The U.S. Commodity Futures Trading Commission should appeal a federal judge’s decision blocking Dodd-Frank Act limits on speculation in oil, natural gas and other commodities, said Commissioner Bart Chilton.
The CFTC should also seek a stay of U.S. District Judge Robert Wilkins’s Sept. 28 ruling that the agency failed to assess whether limits were necessary and appropriate under the 2010 regulatory overhaul, Chilton said in remarks prepared for a speech tomorrow in Rome at the Food and Agriculture Organization of the United Nations.
“The struggle isn’t over,” said Chilton, one of three Democrats on the five-member commission. “I think the court opinion is deeply flawed.”
The court decision stymied rules from taking effect Oct. 12 that were challenged by the Securities Industry and Financial Markets Association and International Swaps and Derivatives Association Inc. The associations represent JPMorgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley and other banks and energy trading firms.
The agency should start drafting another version of the rule to account for the judge’s objections, Chilton said. The agency should issue an interim final rule with a 15-day period of public comment, he said.
“We already know what most folks think,” Chilton said. “This would allow us to quickly do what we had planned.”
In his ruling, Wilkins said the law requires the CFTC to find that limits are necessary before imposing them.
“The Dodd-Frank amendments do not constitute a clear and unambiguous mandate to set position limits, as the commission argues,” Wilkins wrote.
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