Bart Chilton, a Democratic member of the Commodity Futures Trading Commission, called a court ruling overturning limits on speculative trading “deeply flawed” and vulnerable to appeal on Tuesday.
Chilton called on the CFTC to challenge the ruling, which was handed down by a federal judge in Washington last week and ends the agency’s position limits rule that was meant to regulate speculative Wall Street trading tied to energy prices, Dealbook reports.
“Position limits are simply too important,” Chilton said, according to Dealbook.
Under the proposed positions limits rule, traders would face a cap on derivatives contracts of 28 commodities, including energy products like natural gas and oil.
Chilton and others who support the rule contend that consumers would be protected from speculative commodities trading. The rule has origins in Dodd-Frank and faced stiff opposition when it was adopted last fall.
A December lawsuit against the rule by the Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association alleged that Dodd-Frank only gave regulators the ability to enforce position limits “as appropriate,” Dealbook reports.
Judge Robert L. Wilkins of the United States District Court for the District of Columbia vacated the rule, sending it back for “further proceedings.”