FACTBOX-Key comments on CFTC’s energy position limits plan

(Adds CME Group and PIMCO)

April 27 (BestGrowthStock) – The U.S. Commodity Futures Trading
Commission wrapped up a public comment period on Monday on a
proposal that would cap the number of contracts a trader can
hold in oil and natural gas futures markets.

The proposal has generated thousands of responses, mostly
letters from individuals who support the clamp-down.
[ID:nCFTCREG]

CFTC Chairman Gary Gensler told the Reuters Global
Financial Regulation Summit on Monday that he was still wading
through the comments and said there was no timetable for making
a decision on position limits. [ID:nN26184443]

Below are selected comments and a list of meetings CFTC
officials have had with industry representatives.

CME GROUP INC (CME.O: )

* CFTC should defer action on position limit plan until
U.S. Congress completes financial reform legislation.

* Limits would exacerbate further shift away from
CFTC-regulated markets to less restrictive venues.

* Limits would bring further uncertainty as Congress
continues to work on financial reform.

* Argued CFTC has not met statutory requirements to impose
position limits. [ID:nN27193368]

PACIFIC INVESTMENT MANAGEMENT COMPANY (PIMCO)

* World’s biggest bond fund manager

* Limits would unnecessarily restrict their access to
futures market.

* Proposal will severely limit the ability of swap dealers
to hold positions in the energy commodities covered under the
plan.

* CFTC should eliminate the distinction between hedge
exemptions and risk management exemptions.

AMERICAN PETROLEUM INSTITUTE

* Limits could severely limit the hedging activity of oil
and natural gas companies who engage in swap trading.

* Limits could decrease liquidity and push energy trading
to over-the-counter or foreign markets.

* Could lead to greater instability in energy markets.

UNITED STATES COMMODITY FUNDS

* Manager of leading exchange-traded funds U.S. Oil Fund
(USO.P: ) and U.S. Natural Gas Fund (UNG.P: ).

* Limits would hamper ability to meet investment goals.

* Limits could increase price volatility.

* Argued ETFs should be exempt from limits.

* CFTC should use “look-through” approach to regulate
individual positions in the funds.

INTERCONTINENTALEXCHANGE (ICE.N: )

* Limits would hurt new or smaller exchanges trying to
compete with larger players because it would limit positions
not only across all exchanges, but also at individual
exchanges, based on open interest seen in the previous year.
[ID:nN13238656]

INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION

* Limits would severely limit liquidity in futures markets
and may push traders overseas or to unregulated markets.

* Aggregating positions by account ownership rather than
account control is unwarranted and would hurt large,
diversified players.

* Proposed exemptions for hedgers and swap dealers are too
onerous.

DB COMMODITY SERVICES

* U.S. subsidiary of Deutsche Bank AG (DBKGn.DE: )

* Runs 11 commodity pools with more than 900,000 investors
and about $11 billion in investor assets.

* Proposal is “unduly onerous” and will limit the
usefulness of U.S. futures markets to international traders.

* Passive index funds should be exempt from limits.

MICHAEL MASTERS, HEAD OF MASTERS CAPITAL MANAGEMENT

* Hedge fund manager, who has blamed excessive speculation
for record commodities prices in recent years.

* CFTC should set a speculative percentage target for
energy markets.

* Passive investors should be banned from commodities
markets or severely restricted. [ID:nLDE63K0NS]

AIR TRANSPORT ASSOCIATION

* Industry trade group for U.S. airlines.

* Proposed position limits should be strengthened.

* Index funds and other passive investors should be subject
to position limits.

* Exemptions for limits only for “true end-users.”

FUTURES INDUSTRY ASSOCIATION

* Speculators are not responsible for high energy prices.
[ID:nN18245222]

* CFTC should wait for Congress to act on financial
regulatory reform.

* Argued CFTC does not have authority to impose limits.
[ID:nLDE62I1F9]

INDUSTRIAL ENERGY CONSUMERS OF AMERICA

* Represents manufacturing firms.

* Proposed position limits are set too high.

* Index funds should be banned, or at least be made subject
to the speculative position limit of a single person.

MEDITERRANEAN SHIPPING COMPANY

* Second-largest container shipping company in the world.

* Supports limits on speculation, but said the CFTC’s
proposed limits are too large.

PETROLEUM MARKETERS ASSOCIATION OF AMERICA

* Said limits were “overly generous” and should be lowered
to position size historically held by speculators in the period
before the run-up in energy prices in 2008.

AMERICAN GAS ASSOCIATION

* CFTC should protect ability of commercial hedgers to
engage in risk management transactions.

* Entities with separate and independent trading activities
should be able to obtain their own hedging exemption.

PRIVATE MEETINGS WITH CFTC COMMISSIONERS OR SENIOR STAFF:

* IntercontinentalExchange, Feb 22

* Chicago Mercantile Exchange, Feb 24

* Air Transport Association, March 3.

* Managed Funds Association, April 8.

* Delta Air Lines (DAL.N: ), April 22.

* Goldman Sachs, date not specified.

Money

(Reporting by Christopher Doering, Ayesha Rascoe, Tom Doggett
and Roberta Rampton; Editing by Alden Bentley, Carole Vaporean
and David Gregorio)

FACTBOX-Key comments on CFTC’s energy position limits plan