Two leading energy exchange traded fund (
) providers urged the Commodity Futures Trading Commission to
forestall action on position limits to U.S. oil and gas markets,
which the fund providers believe would increase costs and reduce
liquidity in related funds.
U.S. Commodity Funds
, two fund providers that amassed vast long positions in oil and
gas futures, were among the last-minute petitioners to the CFTC
during a 90-day public comment period, which ends today.
Nicholas Gerber, chief executive of the U.S. Commodity Funds
LLC, told the CFTC that "the unintended consequences of the
proposed rule may lead to even less transparency and more risk for
investors in the financial energy markets." Gerber is urging the
CFTC to base any limits on the millions of underlying holders
rather than the ETF provider.
Regulators have sought to regulate the futures market so as to
limit undue influence over prices,
. Some studies have come to question the theory that financial
investment have artificially inflated prices. Still, the political
will to curb investment into commodity markets remains strong and
is being reinforced by the government's stance on tough financial
Commodity, Leveraged ETFs In Regulators'
Hans Ephraimson, CEO of DB Commodity Services LLC, stated that
the CFTC's proposal "finds no support in empirical evidence or
regulatory precedent, it's unduly onerous, will significantly limit
the usefulness of the U.S. future markets to international traders,
and is premature in light of pending congressional legislation." [
What CFTC's Proposal for Commodity ETFs May
There are hundreds of comments on the CFTC's site. To read them,
. To leave your own comment before the deadline is up,
visit the CFTC's
For more information on energy, visit our
Max Chen contributed to this article.