Industry group sees no abuse in energy markets; US lawmakers howl
[WASHINGTON] A plan to limit speculation in energy markets will only hurt investors, an industry group told US securities regulators on Thursday, a message that drew a fast rebuke from some lawmakers.
"Excessive speculation is not evident in the energy markets," members of the industry-led panel told the Commodity Futures Trading Commission, which is contemplating whether oil and gas hedging abuse exists and needs controls.
The panel, the Energy and Environmental Markets Advisory Committee, was conceived by the Dodd-Frank Wall Street reform legislation and gives industry a voice in futures regulation.
But the outside group has no rule-writing authority and some lawmakers recommended that it be ignored.
The panel's findings are "little more than a list of talking points for an industry that hopes to escape meaningful regulation," wrote Democratic Senator Elizabeth Warren of Massachusetts.
Senator Sherrod Brown, the most senior Democrat on the Banking Committee, said he was surprised "that the CFTC would create a committee designed to undermine the law it's charged with enforcing."
The CFTC has since 2013 been mulling whether to extend a limit on agricultural commodity futures, options and swaps to energy trades.
On Thursday, CFTC Chairman Timothy Massad indicated he was not swayed by the outside panel's argument, The Wall Street Journal reported. "It strikes me a bit like saying you're against speed limits because they may make you late for work," Mr Massad said in defending his agency's oversight of energy trades, the newspaper reported online.
The majority of the outside panel concluded that a plan to limit such positions was "a solution to a non-existent problem"and that restrictions would hinder markets as they find fair prices for energy.
But the one, non-industry member of the panel highlighted cases of past market manipulation in a call for more regulations and faulted his peers and their findings.
The energy panel is "weighted in favor of interests that may have a disposition to opposing the concept of position limits," Tyson Slocum of Public Citizen wrote in a dissent.
REUTERS
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