CFTC's Bart Chilton contends his fellow regulators on the Commodity Futures Trading Commission are moving too slowly to rein in speculative trading in oil and food. Mr. Chilton urged regulators to use every authority to ensure prices consumers and businesses are paying are totally fair and accurate.  His remarks at today's CFTC’s Agricultural Advisory Committee meeting came as the agency is currently considering a plan to enact so-called position limits on 28 commodities — oil, wheat, corn and the like. Existing position limits apply to only nine items.

The Dodd-Frank Act, the financial overhaul law enacted last year, requires the commission to limit the amount of futures contracts that a single trader or firm can hold on a commodity. Traders who place large and speculative bets on commodities can cause wild price fluctuations, hurting consumers at the gas pump and in the supermarket.  The law left it up to regulators to set the scope of the limits, which after internal wrangling and delays has emerged as one of the thorniest issues facing the commission. Under Dodd-Frank, the commission was supposed to begin enforcing the rules in January. But the commission did not propose the limits until Jan. 13.

Although the proposal’s public comment period closed on March 28, the commission has yet to say when it might vote on a final rule.

Commission officials at the meeting also noted that they received some 12,000 comment letters, which will take until the end of May to review. Until then, the proposal is on hold.

The delay has been costly, Mr. Chilton said, noting that speculative positions in energy markets jumped 64 percent from June of 2008 to January 2011.

As Wall Street scrambles to challenge new regulations for derivatives trading, executive compensation and debit card fees, the position limits proposal has spent months flying under the radar. [NYTimes 5/19/11]