US attack on ‘speculation’ advances
24 Jul 2008
US Congress passed new legislation on Tuesday aimed at trimming speculation in the energy markets by institutional players.
A procedural vote on Senate majority leader Harry Reid’s Stop Excessive Energy Speculation Act of 2008 to debate the bill was passed 94-0 by the Senate.
The legislation, however, still has a long way to go to become law.
Reid’s bill would impose new speculative position limits on commodity trades on OTC markets as well as on non-US futures exchanges.
The bill also aims to distinguish between what it terms “legitimate hedge trading” and speculation from large institutions, by placing position limits and reporting requirements on them.
Because the Commodity Futures Trading Commission already sets speculative position limits, the...
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