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CFTC commissioner nominees pledge to complete position limit rules

Published 07/27/2017, 12:22 PM
Updated 07/27/2017, 12:30 PM
© Reuters.  CFTC commissioner nominees pledge to complete position limit rules

By Sarah N. Lynch

WASHINGTON (Reuters) - Three of President Donald Trump's nominees to serve as commissioners on Wall Street's top derivatives regulatory agency on Thursday pledged to work to complete rules that would restrict trading by market speculators who bet on the rise and fall of prices.

The nominees to the Commodity Futures Trading Commission, Republicans Dawn Stump and Brian Quintenz, and Democrat Rostin "Russ" Behnam, told the Senate Agriculture Committee during their confirmation hearing that they are committed to working to craft a final "position limits" rule that would limit speculators without harming farmers, ranchers and others who rely on futures markets to hedge their business risks.

"I look forward to helping... finalize this rule," said Stump, adding that she will work to ensure that the strategies agricultural businesses use to hedge "are not prevented in the future due to unworkable bonifide hedging restrictions."

Bonham said: "The relevant question is not whether or not position limits should be completed, but how they should be completed."

The CFTC won broad new powers under the 2010 Dodd-Frank Wall Street reform to police the massive over-the-counter derivatives markets.

The agency has largely implemented the bulk of the rules, which required many kinds of derivatives to be cleared centrally to reduce the risk of default and traded on platforms with greater price transparency.

The CFTC is primarily focused on reviewing more carefully how the rules are working and whether certain rules should be tweaked to reduce burdens.

Acting CFTC Chairman Chris Giancarlo, who is awaiting Senate confirmation as permanent chairman, earlier this year launched a review that aims to streamline and simplify existing regulations.

However, there are still a number of outstanding rules that need to be completed, with the position limits rule one of the most notable.

Although there has generally been considerable tension between Democrats and Republicans over Trump's nominees to various positions since January, there was no such divisiveness on display Thursday.

Both Senate Agriculture Chairman Pat Roberts and Ranking Member Debbie Stabenow signaled they intend to support the nominations of all three.

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