Tim Sloan/AFP-Getty Images
“My firm belief is that we must aggressively use all existing authorities to ensure market integrity,” Gary Gensler, the chairman of the Commodity Futures Trading Commission, said in a statement.
By EDMUND L. ANDREWS
WASHINGTON — Reacting to swings in oil prices in recent months, federal regulators announced on Tuesday that they were considering trading restrictions on hedge funds and other “speculative” traders in markets for oil, natural gas and other energy products.
In a big departure from the hands-off approach to market regulation of the last two decades, the chairman of the Commodity Futures Trading Commission, Gary Gensler, said his agency would consider limits on the volume of energy futures contracts that purely financial investors would be allowed to hold.
The announcement also highlights a broader shift toward tougher government oversight under President Obama. Since Mr. Obama took office, the Justice Department has stepped up its antitrust enforcement activities, reversing many of doctrines adopted by the Bush administration. The Securities and Exchange Commission is ramping up as well, having been sorely embarrassed by its failure to heed warnings about Ponzi scheme run by the money manager Bernard L. Madoff.
The Obama administration is also proposing a broad overhaul of financial regulation that would include tougher rules in the free-wheeling market for arcane financial instruments called derivatives.
When it comes to supervising oil and gas trading, regulators made it clear they were willing to move ahead on the basis of their existing authority, without waiting for Congress to act on Mr. Obama’s broader overhaul.
“My firm belief is that we must aggressively use all existing authorities to ensure market integrity,” Mr. Gensler said in a written statement.
NY Times for more