A federal court has halted efforts by the Commodity Futures Trading Commission (CFTC) to implement portions of the Dodd-Frank financial reform law regulating derivatives.
A U.S. District Court judge ruled Friday that it was unclear whether the CFTC could go ahead and set limits on the amount of positions a trader could hold in various commodities without first deciding the rule was necessary and appropriate. The CFTC had hoped the rules would help it curb speculative trading in the derivatives market, which came under scrutiny following the 2008 financial crisis.
“Although the court does not foreclose the possibility that the CFTC could, in the exercise of its discretion, determine that it should impose position limits without a finding of necessity and appropriateness, it is not plain and clear that the statute requires this result,” the judge said, according to Bloomberg.
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