WASHINGTON, D.C. – U.S. Senators Maria Cantwell (D-WA) and Olympia J. Snowe (R-ME) today, in response to the Commodity Futures Trading Commission’s (CFTC) refusal to reverse its no-action policy, called on the CFTC to acquire market surveillance data directly from the Intercontinental Exchange Futures Europe starting today. Legal experts joined the Senators in identifying the authority the CFTC has to collect information directly from ICE.  This authority is available to the Commission through its own no-action letter issued to the International Petroleum Exchange (now titled the InterContinental Exchange or ICE) on November 12, 1999.

 

"It's time for ICE to name names,” said Cantwell.  "The CFTC has the legal authority to find out who these large traders are and whether as few as three to four organizations are driving the market.”

 

Senator Snowe added,“This country is in an energy crisis, but you wouldn’t know it by watching Congress. At a time when American people cannot escape the direct impact that rising gas and oil prices have on their day-to-day lives, it is incumbent that we ensure that our energy futures markets are transparent and demonstrate supply and demand – not manipulation by large institutional investors.  Although the historic price increases and their toll on the American people is similar to the energy crisis of previous generations, speculation is massively different and we must ensure that these markets are properly working and not subject to manipulation.  The CFTC must recognize this central difference and act accordingly by reasserting control over our futures markets.”

 

On May 23, 2008, Senators Cantwell and Snowe and 20 of their Senate colleagues sent the Commodities Futures Trading Commission a bipartisan letter  urging the Commission to “take immediate action to protect consumers by ensuring that U.S. energy futures markets are fully transparent and subject to direct Commission oversight.”  They noted that “the current differential regulatory regimes governing the buying and selling of West Texas Intermediate crude oil future contracts and other U.S. delivered energy products are hurting American consumers and taxpayers and allowing market players to artificially influence and elevate prices in excess of those determined by historic supply and demand fundamentals.  The Commission already has the power to take action we believe could swiftly and considerably lower out-of-control energy prices and we hope on behalf of the nation you use it expeditiously and effectively.”

The legislation introduced by the Senators today will force ICE to register as a designated contract market (DCM) allowing the CFTC to directly regulate all U.S. oil futures markets and ensure they are subject to the same level of oversight and transparency.

 

“It's time to melt away the idea that ICE is a foreign board of trade and instead shine some bright light into this dark market and make sure all exchanges trading U.S. commodities be registered.Consumers across the country are losing confidence that they’re being protected from out of control prices, and we must establish a clear, bright line to help protect consumers from any illegal activity and to burst the oil price bubble,” continued Cantwell.

 

 

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