CFTC closes loophole in agricultural trade
On August 19, the Commodity Futures Trading Commission decided to close a loophole that permitted certain types of trades in agricultural commodities to occur.
On August 19, the US Commodity Futures Trading Commission (CFTC) decided to close a loophole that permitted certain types of trades in agricultural commodities to occur. The loophole was a factor in price increases in corn, soybeans and wheat in early 2008, according to the American Feed Industry Association , which found the loophole concerning and worked with the CFTC to resolve it.
The CFTC announced it would close the loophole by withdrawing two "no-action" letters that had resulted in Deutsche Bank and another investment firm exceeding speculative position limits on corn, soybeans and wheat.
"AFIA provided the CFTC and US Congress with a broad set of recommendations for reform more than a year ago, and today we applaud the agency for beginning to move in that direction," said Joel G. Newman, AFIA president and CEO.
AFIA will continue to work with the CFTC to recommend appropriate changes that will ensure commodity markets are effective for both agriculture and speculators, Newman said.