Commodity Futures Trading Commission Urged to Review Automated Trading, Position Limits and Enhance Public Data Reporting after Instability
WASHINGTON, D.C. — In a letter to the U.S. Commodity Futures Trading Commission (CFTC), Public Citizen today called on the Commission to unambiguously reject any bailout for commodity traders. Over the past few weeks, wild price swings in energy, metal, and agricultural commodity prices have stressed markets.
Tyson Slocum, the letter’s author, is the energy program director at Public Citizen and serves on two federal advisory committees for the CFTC, issued this statement:
“Americans are exposed to increasingly expensive and volatile commodity prices. Federal regulators must take steps to improve transparency and the functioning of these markets. But the request this month by some of the largest energy traders operating in the US for a bailout must be swiftly rejected.
“Challenges with traders’ access to credit due to margin requirements won’t result in energy not being produced or delivered, but it will ensure the solvency of the market. The margin requirements in place today limit real systemic risk and it is critical that the CFTC consider strengthening position limits, addressing the problematic role of algorithmic traders, and improve data transparency.”