UPDATE 2-NYSE Liffe consults on soft commodity regulation

* Liffe seeks customer feedback on regulation

* Commitment of traders report trial begins

(Adds details, background)

By Sarah McFarlane

LONDON, Sept 28 (BestGrowthStock) – NYSE Liffe (NYX.N: ) is launching
a consultation on the regulation of its London-based soft
commodity contracts, the exchange said on Tuesday.

“As a follow-up to its regulatory review concluded last year
the exchange intends to again seek the views of its key
customers to help determine if further changes are needed to its
regulatory policy for commodities,” a spokesman for the exchange

The fresh consultation will consider European proposals for
increased oversight of commodity markets and coincides with the
trial period for the exchange’s new position reporting regime,
which begins on Tuesday.

The weekly commitment of traders report, detailing positions
held in London’s white sugar, cocoa and robusta coffee markets,
will not be publicly available during the trial period.

The exchange said the trial period would continue until
further notice.

Dealers said one of the findings of the previous regulatory
review was that exchange clients were supportive of a commitment
of traders report to increase market transparency, but there was
not widespread support for the introduction of position limits.

“We will naturally be mindful of the broader developments on
the subject of market regulation, including proposed regulations
on EU commodity derivatives markets, covering both market
transparency and the potential imposition of some form of
position or delivery limits,” the spokesman said.

European commodity markets are under pressure to tighten
regulation as the United States pushes forward with plans to
curb speculative activity, blamed by some for boosting food and
energy prices to record highs in 2008.

The New York-based Intercontinental Exchange (ICE) (ICE.N: )
is more heavily regulated than the London Liffe soft commodity
markets, providing a weekly position report and enforcing
position limits.

Earlier this month the European Commission said it planned
to rein in speculation on commodities markets via financial
market reforms, but it’s not yet clear what these reforms will
involve. [ID:nLDE68J0E5]
(Editing by James Jukwey)

UPDATE 2-NYSE Liffe consults on soft commodity regulation