UPDATE 2-US, EU regulators talk reform, tour exchange

* Gensler, Barnier discuss position limits, OTC reforms

* Working together on consistent regulations for U.S., EU

* Toured CME, met traders, ICE executives

* Regulators have “spirited” talk with CME execs
(Adds CFTC’s plans for position limits rule-writing)

By Ann Saphir

CHICAGO, Nov 2 (BestGrowthStock) – Top regulators from the United
States and the European Union discussed reforms for futures and
over-the-counter derivatives as they toured the world’s largest
exchange on Tuesday and lunched with a group of Chicago futures
traders and financial executives.

Gary Gensler, chairman of the U.S. Commodity Futures
Trading Commission, and Michel Barnier, the 27-country EU’s
financial services chief, discussed concentration in commodity
markets and the role of position limits, among other issues.

“I came to Chicago to understand better how these markets
are functioning,” Barnier said after touring the Chicago
Mercantile Exchange and Chicago Board of Trade’s combined
trading floors with CME Group Inc (CME.O: ) CEO Craig Donohue.

They had earlier met with IntercontinentalExchange Inc
(ICE.N: ) CEO Jeffrey Sprecher and Chicago Climate Exchange head
Satish Nandapurkar.

Barnier said he expected to launch a public consultation
early next year before legislating Europe’s first position
limits by mid-2011. The CFTC is also working on rules that will
expand position limits in the U.S. so they apply to a wider
range of commodities and swaps.

“I’m interested in these position limitations in volume,
and also in the idea that they can be extended in time,”
Barnier said, speaking through a translator. “I am concerned by
the consequences of hyperspeculation, especially in
agricultural commodities.”

Barnier met U.S. Treasury Secretary Timothy Geithner last
week in Washington to discuss capital and liquidity standards
for banks. [ID:nN29277050][ID:nN29234011]

Gensler and Barnier, speaking ahead of a lunch in Chicago’s
historic Willis Tower with Futures Industry Association
members, reiterated they were working on consistent regulations
for oversight of the $615 trillion global swaps markets.

Noting the six days the commissioner had spent in the
United States and the daily sharing of documents between U.S.
and European regulators, Gensler said the goal was “to make
sure that we are equivalent enough that U.S. institutions can
offer their services in Europe, and European institutions can
offer their services in the U.S., but in all circumstances that
the public is protected.”

Gensler reiterated the commission’s plan to propose rules
for position limits by December. But, given the scores of new
regulations that need to be written to implement sweeping Wall
Street reform passed over the summer, that deadline could slip,
he said.

The two regulators acknowledged having a “spirited”
discussion about a range of regulatory issues with CME’s
Donohue and his staff earlier in the day.

“What I explained to them is that perhaps we are going to
take decisions that they will dislike, but at least we are
going to take them together,” Barnier said, as Gensler smiled
and nodded at his side.
(Additional reporting by Roberta Rampton; Editing by Walter
Bagley)

UPDATE 2-US, EU regulators talk reform, tour exchange