[ by Melanie Gretchen ]

Dodd-Frank will not die.

The CFTC is not letting Wall Street off the hook.  In December, SIFMA and the International Swaps and Derivatives Association (ISDA) successfully sued the CFTC for overstepping its authority -- a federal judge in Washington this month halted the agency’s so-called position limits rule, a plan that would cap speculative commodities trading.

Arguments:

• Pro: The CFTC contended that Congress gave it no choice but to impose position limits; the "appropriate" requirement -- as noted in Dodd Frank -- refers to setting position limits at a reasonable level, the agency argued.
• Con: SIFMA and ISDA argued that Dodd-Frank, which created the position limits plan, leaves it to regulators to enforce position limits only "as appropriate."

This month, the trading agency is preparing to appeal a recent court ruling that struck down new curbs on Wall Street trading.

What's at Stake:

• The ruling in question: the so-called position limits rule would limit the number of derivatives contracts a trader could hold on 28 commodities, including gold and energy products like oil and natural gas.
• When will the agency will file the appeal before the United States Court of Appeals for the District of Columbia?  We don't know: 3 of the 5 commissioners must first sign off on the plan, which will probably happen in the coming days
• Will are the chances of success? Not in the bag: The court, dominated by Republican appointed judges, has been unfriendly to financial regulators in the recent past, throwing out SEC rules 6 times in 7 years.

Nevertheless, CFTC chairman Gary Gensler championed the rule's potential.

"I believe it is critically important that these position limits be established as Congress required."

For further details, go to [Dealbook, 10/9/12].