CME CEO Cautions CFTC on Position Limits for Energy Futures Trading

CME Group’s CEO Craig Donohue will appear before the U.S. Commodity Futures Trading Commission (CFTC) today to discuss position limits for energy futures trading, according to the derivatives marketplace.

In a statement Donohue offered a preview of his remarks:

“We have not seen any empirical evidence that index funds and speculators distort prices, as has been widely alleged, nor it there any proof that putting position limits on these market participants will have any positive effect on the marketplace,” Donohue said.

In the statement, Donohue continued, “We are deeply concerned that inappropriate regulation of these markets will cause market participants to move to dark pools and other unregulated markets, causing irrevocable mar to the entire U.S. economy.” Donohue said he would look forward to having an open dialogue on the topic with the CFTC, elected officials and industry participants to ensure the continued safety and soundness of an already highly regulated financial market.

Meanwhile, today’s Wall Street Journal is reporting that the CFTC plans to issue a report in August blaming traders and speculators for contributing to 2008’s wild swings in oil prices. This is a reversal of a previous study under the Bush Administration which linked oil-price moves to supply and demand forces.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio