March 25, 2010
Good morning. I call to order this public meeting of the Commodity Futures Trading Commission to examine the trading of futures and options in the precious and base metals markets.
I would like to start by thanking my fellow Commissioners and our distinguished panelists for being here today. I look forward to hearing from the diverse group of participants about many aspects of the metals markets.
Today’s meeting builds upon our ongoing look into how the Commission regulates futures and options markets on commodities of finite supply. In July and August, the Commission held three open meetings to discuss energy futures and options markets, which were informative and insightful. In January, the Commission voted to propose a rule that would re-establish position limits in the energy markets and make the process for granting exemptions more consistent and transparent. We continue to receive comment letters from the public on this issue and encourage interested members of the public to submit letters until April 26, 2010. Instructions to do so are available at www.cftc.gov. In today’s meeting, we turn to the metals markets.
Though the issue of position limits will be central to today’s discussion, the intent of this morning’s meeting is to discuss many broad issues related to the metals futures markets. In particular, I would like to hear panelists’ views on how price discovery works in the metals markets and how the cash markets influence that process. I also am interested in how the U.S. futures markets that we currently regulate relate to the international metals markets as well as the over-the-counter metals derivatives marketplace.
What are the panelists’ views on differences between the metals markets and the energy markets? In particular, what significance does the fact that metals markets are more concentrated than the energy markets have on regulation? Further, I’m interested in a discussion of the role of hedgers, speculators, exchange traded funds and index funds in the marketplace.
I look forward to hearing panelists’ views on whether it would be appropriate to re-establish position limits in the metals futures markets. Specifically, would such limits enhance market integrity and efficiency? If position limits were to be re-established, should the CFTC use similar formulas in the metals markets to the formulas that are currently used in the agriculture markets or as what was proposed in the energy markets? What types of exemptions from limits, if any, would be appropriate in the metals markets?
I look forward to hearing from everyone who is participating in today’s meeting. I believe that we have a diversity of points of view that will provide for a thoughtful discussion on this very important subject. I will also note that written comments on the topic of this meeting will be accepted from the public until April 30, 2010, and included in the record. Based upon what we learn, we will further review CFTC rules to determine what, if any, course of action is most appropriate.
I will now turn to Commissioner Dunn for his opening statement.
Last Updated: June 14, 2010