The Commodity Futures Trading Commission (CFTC) Thursday announced a new agreement with the United Kingdom’s Financial Services Authority (FSA) to strengthen cross border supervision of energy futures markets. At the same time the CFTC extended the new rules to ICE Futures Europe.

The CFTC said it and the FSA would immediately work toward implementing strengthened surveillance over linked energy contracts including, where appropriate, through:

The measures are aimed at “ensuring that futures markets remain free of manipulation, fraud, or other market abuses,” Chairman Gary Gensler said. “Achieving this goal requires a coordinated international response. The CFTC will work closely with the United Kingdom’s Financial Services Authority to respond to these challenges in a coordinated manner.”

At the same time the conditions were extended to apply to ICE Futures Europe as part of a revised “No Action” letter under which the overseas exchange is allowed to offer trading terminals in the U.S.

Said David Peniket, president of ICE Futures Europe: “We welcome the CFTC-FSA statement and will continue to work closely with regulators around the world to ensure the effective operation of global oil markets. ICE Futures Europe has a 30-year track record as a regulated futures exchange performing rigorous surveillance, regulatory and compliance functions. We will continue to work with the FSA and CFTC to ensure full compliance with all terms.”

The IntercontinentalExchange noted that since 2006, it has provided trade information for ICE Futures Europe’s U.S. linked markets to the CFTC through a memorandum of understanding between the CFTC and the FSA. As the result of earlier agreements with the regulatory agencies the contracts are today subject to U.S.-style position limit and position accountability regimes. “ICE WTI crude futures contract positions are reported in the CFTC’s weekly Commitment of Traders (COT) report, with over 70% of the positions being classified as Commercial Participants in the most recent report. “

As part of its campaign to strengthen futures market oversight, last month the CFTC moved to bring ICE’s Henry Financial LD1 Fixed Price contract, or the Henry Hub natural gas “look-alike,” under its regulatory authority, saying the contract “performs a significant price discovery function.” The ICE contract is similar to the CME Group’s Nymex Henry Hub contract, which already is under CFTC regulation. (see Daily GPI, July 28).

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.