WASHINGTON (Reuters) - U.S. oil futures regulators on Tuesday unveiled a plan to slap the first trading limits on oil contracts that change hands on a London electronic exchange as U.S. lawmakers called for more regulations to rein in speculators.
The U.S. Commodity Futures Trading Commission and its U.K. counterpart reached a deal with ICE Futures Europe (ICE.N: Quote, Profile, Research) to impose regulations on West Texas Intermediate oil contracts that trade on the London-based electronic exchange within 120 days, the CFTC’s chairman told U.S. lawmakers.
The move will place more limits on trading of the U.S. benchmark WTI contract on the London exchange, which hosts up to 30 percent of total volumes. The New York Mercantile Exchange (NMX.N: Quote, Profile, Research), which the CFTC regulates, has the rest.
Lawmakers said the lack of limits on the ICE exchange created what they call the “London loophole” that allows oil traders to evade U.S.-style regulations.
Charles Vice, president and chief operating officer of the Atlanta-based IntercontinentalExchange Inc, said it is “highly unlikely” that ICE Futures Europe is the “primary driver” behind WTI prices.
Expectations that more regulations on ICE trading will tame prices “are likely to go unmet,” Vice said.
http://uk.reuters.com/article/newsOne/idUKN1738898720080617