A federal court has put a stop to limits the Commodity Futures Trading Commission was set to impose on firms trading in certain commodity contracts in an effort to prevent price manipulation by speculators.
The lawsuit, International Swaps and Derivatives Association v. U.S. Commodity Futures Trading Commission, was filed in U.S. District Court in the District of Columbia by the International Swaps and Derivatives Association (ISDA) and the Securities Industry and Financial Markets Association (SIFMA). The trade associations challenged CFTC rulemaking that, as of Oct. 12, was to begin capping the maximum number of contracts that are bought and sold for 28 physical commodities, among them oil, gasoline, corn, wheat, cotton, sugar, silver, and platinum. Traders would have been required to aggregate their holdings when determining position limits.
