Senate Committee Targets Commodities Market Speculation

The Senate Agriculture Committee is scheduled to mark up a bill Wednesday that would impose stiffer regulations on the speculative trading of commodities, but would exempt trades from legitimate commercial hedgers like trucking companies.

The Wall Street Transparency and Accountability Act was introduced Friday by Sen. Blanche Lincoln (D-Ark.), chairwoman of the agriculture committee.

The bill would “bring 100% transparency to an unregulated $600 trillion market,” Lincoln said in a statement.

According to a committee press release, the bill includes mandatory clearing and trading requirements, real-time reporting of derivatives trades and ensures that all loopholes are closed.

“The clearing and trading of financial transactions lowers risks and makes the entire financial system safer,” she said.

“Diesel fuel is the lifeblood of the trucking industry, and sudden fluctuations in operating expenses, especially fuel, can devastate trucking companies,” said Rich Moskowitz, vice president and regulatory affairs counsel for American Trucking Associations.

“Increasing transparency and setting position limits while preserving the ability of commercial entities to hedge fuel purchases will strengthen the link between commodity prices and market fundamentals,” he said.

ATA is one of several groups that has pushed for greater regulation of speculative trading in the commodities markets, specifically in the oil markets.