Iosco group to turn spotlight on commodity markets
The US Commodity Futures Trading Commission and the UK Financial Services Authority are to lead a new international regulators' group overseeing the commodity markets.
A meeting of the technical committee of the International Organisation of Securities Commissions (Iosco) in Madrid last month raised the possibility that commodities regulators were becoming unable to cope with the rapidly-evolving commodities market. The new Task Force on Commodity Markets (TFCM) will be led by the CFTC and the FSA, and will include other regulators from both developed and emerging markets, Iosco said.
Recent record commodity prices had "underscored" the need for competent oversight of the pricing process, CFTC chairman Walter Lukken told the US House of Representatives last month. He also raised the possibility that the growth in swap dealer and index trader activity in the commodity markets, or the growth in electronic markets, were affecting commodity prices.
A CFTC staff report released alongside Lukken's testimony called for tighter oversight of swap dealers and more data collection on their trades.
And the FSA, in a paper released in March 2007, warned that growing trading volumes could stress trading platforms and risk measurement systems.
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