Wall Street traders sue CFTC
While the shouts of the Occupy Wall Street protesters continue to echo throughout the financial district, commodities traders are raising their voices to launch their own fight.
December 05, 2011 at 05:56 AM
3 minute read
The original version of this story was published on Law.com
While the shouts of the Occupy Wall Street protesters continue to echo throughout the financial district, commodities traders are raising their voices to launch their own fight.
On Friday, Wall Street trade groups sued the Commodity Futures Trading Commission (CFTC) in an attempt to block new rules that prevent excessive speculation in markets such as oil and gold. The suit is the first ever filed against a CFTC rule.
The trade groups, which include the Securities Industry and Financial Markets Association (SIFMA) and the International Swaps and Derivatives Association (ISDA), claim the CFTC's rule is flawed and unreasonable. Additionally, the trade groups say the CFTC hasn't conducted an adequate cost-benefit analysis of the “position limits” plan, which the agency passed in October, and caps the number of futures and swaps contracts that a single trader can hold. Traders worry the plan could reduce liquidity and increase market volatility.
“It has the potential to harm markets at a time when they can least afford it,” said ISDA Chief Executive Conrad Volstad and SIFMA President and CEO T. Timothy Ryan Jr. in a statement.
The plaintiffs have petitioned the DC Circuit to hear the case, likely because that court sided with Wall Street in July to quash a Securities and Exchange Commission rule that would've made it easier for shareholders to nominate directors to corporate boards.
Read Thomson Reuters for more about Wall Street's suit against the CFTC.
While the shouts of the Occupy Wall Street protesters continue to echo throughout the financial district, commodities traders are raising their voices to launch their own fight.
On Friday, Wall Street trade groups sued the Commodity Futures Trading Commission (CFTC) in an attempt to block new rules that prevent excessive speculation in markets such as oil and gold. The suit is the first ever filed against a CFTC rule.
The trade groups, which include the Securities Industry and Financial Markets Association (SIFMA) and the International Swaps and Derivatives Association (ISDA), claim the CFTC's rule is flawed and unreasonable. Additionally, the trade groups say the CFTC hasn't conducted an adequate cost-benefit analysis of the “position limits” plan, which the agency passed in October, and caps the number of futures and swaps contracts that a single trader can hold. Traders worry the plan could reduce liquidity and increase market volatility.
“It has the potential to harm markets at a time when they can least afford it,” said ISDA Chief Executive Conrad Volstad and SIFMA President and CEO T. Timothy Ryan Jr. in a statement.
The plaintiffs have petitioned the DC Circuit to hear the case, likely because that court sided with Wall Street in July to quash a Securities and Exchange Commission rule that would've made it easier for shareholders to nominate directors to corporate boards.
Read Thomson Reuters for more about Wall Street's suit against the CFTC.
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