Eight senators have called on the Commodity Futures Trading Commission (CFTC) to reject efforts by Wall Street and the financial industry to water down proposed rules to rein in excessive speculation in the derivative swaps, futures and options markets.

The Commission is scheduled to meet Thursday to take up once again the issue involving restrictions on the size of investors' commodity holdings. The CFTC left the matter unresolved at its last meeting in 2010, and it's questionable whether the agency has enough votes even now to adopt a proposed rulemaking on position limits. CFTC Commissioner Bart Chilton has proposed an alternative -- a softer "interim position 'points' system," which would alert the CFTC to traders with large positions in the market.

The Dodd-Frank Wall Street Reform Act, which President Obama signed into law in July, requires the Commission to impose hard position limits on exempt commodities (metals and energy) by no later than next Monday (Jan. 17), and on agricultural commodities by no later than April 17.

But in recent months, the senators contend that Wall Street firms have mobilized their lobbyists to try to kill the new rules before they ever get off the ground. "It has become increasingly clear that Wall Street seeks to use the rulemaking process to eviscerate the new position limits. We urge you to reject calls to delay the new rules," wrote the senators (seven Democrats, one Independent) in a letter Tuesday to CFTC Chairman Gary Gensler.

"The growing role of hedge funds, financial traders and long-term passive investors in energy and other commodity markets has had devastating consequences for the average American. These speculators have contributed to rising volatility and periodic price spikes [in energy]...It is critical that the Commodity Futures Trading Commission execute these changes," they said.

Signing off on the letter were Sens. Bill Nelson (D-FL), Maria Cantwell (D-WA), Carl Levin (D-MI), Robert Menendez (D-NJ), Patty Murray (D-WA), Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI) and Ron Wyden (D-OR).

The proposed rule, which the CFTC released in mid-December, would limit the amount of positions in futures and options contracts and economically equivalent swaps, other than bona fide hedge positions, that may be held by any entity in one of the 28 covered commodities, including crude oil, natural gas, heating oil and gasoline.

It would set spot or front-month position limits at 25% of deliverable supply for a commodity, with a conditional spot-month limit of five times that amount for entities with positions exclusively in cash-settled contracts.

Nonspot month position limits (aggregate single-month and all-months-combined limits that would apply across classes, as well as single-month and all-months-combined position limits separately for futures and swaps) would be set for each referenced contract at 10% of open interest in that contract up to the first 25,000 contracts, and 2.5% thereafter.

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