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Commodities Briefing - Category | Regulatory more

Levin seeks crackdown on physical commodities

Posted on 17 December 2014 by VRS  |  Email |Print

Sen. Carl Levin has introduced a bill seeking to crack down on trading on inside information in physical commodities, the first such legislation limiting Wall Street banks’ ability to deal in physical markets from crude oil to aluminum.
The bill, co-sponsored with Republican John McCain, is seen as the Michigan Democrat’s parting swipe at Wall Street before he retires in January. He has previously accused Goldman Sachs and other banks of manipulating physical commodity markets……………………………………..Full Article: Source

India should allow banks to hold gold as reserves: WGC

Posted on 10 December 2014 by VRS  |  Email |Print

India should allow banks to use gold as part of their liquidity reserves, which would let them make more use of gold inside the country and reduce the need for imports, an industry body said on Tuesday, seeing that as an alternative to import curbs.
The world’s second-biggest consumer of the metal should also consider setting up an exchange for transparent gold pricing and to streamline trade, according to a report commissioned by the World Gold Council (WGC). “We have made our points to the government and some of these recommendations are in consideration,” said Somasundaram PR, head of the WGC’s India operations. He did not elaborate………………………………………..Full Article: Source

US Banks Reprimanded for Influencing Commodities Prices

Posted on 09 December 2014 by VRS  |  Email |Print

A two-year probe conducted by Republican and Democrat lawmakers from the Senate Permanent Subcommittee on Investigations has found several US banks culpable of major violations in the commodities markets. The report determined that some of the biggest banks, including Morgan Stanley, Goldman Sachs and J.P. Morgan Chase & Company stockpiled massive volumes of inventory in commodities like copper and aluminum.
Beyond stockpiling inventories, these banks gained significant advantage over the financial system by participating in coal production, uranium and other volatile businesses. By participating in these activities, the banks jeopardized the entire financial system………………………………………..Full Article: Source

India: Commodity Market Regulator Plans to Introduce Call Auction

Posted on 01 December 2014 by VRS  |  Email |Print

The Forward Markets Commission (FMC) is planning to introduce the concept of call auction for half an hour in order to curtail market manipulation in commodity futures. The call auction is prevalent in stock markets.
“We are soon planning to introduce call auction for an half hour with 100 per cent delivery. This will help in getting the final settlement price for commodities futures,” FMC Chairman Ramesh Abhishek told PTI. There were some complaints that prices are being manipulated while determining the final settlement price in a commodity futures contract, he said………………………………………..Full Article: Source

Fed on Commodities, Credit Suisse Plea: Compliance

Posted on 25 November 2014 by VRS  |  Email |Print

The Federal Reserve may curtail Wall Street commodity businesses after lawmakers said banks’ role in energy, power and metals markets spurred unfair trading advantages and could threaten financial stability.
At a Senate hearing Nov. 21 held by the Senate Permanent Subcommittee on Investigations, Fed Governor Daniel Tarullo said curbs under consideration include ownership limits, restricting how much revenue can be derived from commodities and requiring Wall Street firms to boost capital. He said the new rules, to be proposed early next year, could restrict banks from investing in oil tankers, coal mines and other businesses involved in physical commodities………………………………….Full Article: Source

Fed set to tighten commodities rules

Posted on 24 November 2014 by VRS  |  Email |Print

The US Federal Reserve is preparing to unveil new restrictions aimed at making it harder for Wall Street banks to make big bets in the commodities markets, according to testimony on Friday from Fed Governor Daniel Tarullo.
Tarullo struck an unexpectedly aggressive stance in his appearance in front of a Senate subcommittee that has been investigating the involvement of big banks in the markets for basic materials like coal, aluminum and gas. Tarullo said the Fed expected to issue a formal notice of potential new rules in the first quarter of next year. Those new regulations could force banks to amass more capital to protect against losses on holdings of commodities and restrict banks from some types of commodities operations that they are currently allowed to do…………………………………Full Article: Source

Senate probe says Goldman, other banks exploited commodity markets

Posted on 20 November 2014 by VRS  |  Email |Print

A two-year Senate investigation into Wall Street’s physical commodities business found that U.S. banks had manipulated prices and gained unfair trading advantages at the expense of consumers.
While the detailed report was critical of how banks purchased and exploited huge commodity stockpiles, it did not offer any damning new details on their activities………………………………Full Article: Source

U.S. Fed began rejecting commodity trade requests in 2010: report

Posted on 20 November 2014 by VRS  |  Email |Print

The U.S. Federal Reserve has been quietly quashing some Wall Street requests to delve more deeply into physical commodity markets since 2010, according to a new Senate report that includes previously unreported details of the Fed’s oversight of the area.
While critical of the “uncoordinated, incoherent patchwork” of rules limiting banks’ activities in physical raw materials trading, the report by the Permanent Subcommittee on Investigations also showed for the first time that the Fed had actually begun denying some requests to engage in the market………………………………Full Article: Source

India: Commodities in regulated warehouses exempted from stock limit

Posted on 11 November 2014 by VRS  |  Email |Print

The government has exempted commodities kept in regulated warehouses from the purview of stock limits effected by state governments to curb hoarding under the Essential Commodities Act.
This was one of the key reforms that commodity markets regulator Forward Markets Commission (FMC) was pushing with the Consumer Affairs Ministry for last few years. In a latest circular, the commission said: “Department of Consumer Affairs has informed that the commodities kept in regulated warehouse (registered by the Warehousing Development and Regulatory Authority) have been exempted from stock holding limits under the Essential Commodity Act, 1955.” ……………………………………….Full Article: Source

CFTC Turns Toward Administrative Judges

Posted on 10 November 2014 by VRS  |  Email |Print

The Commodity Futures Trading Commission plans to start steering some of its cases against trading firms, brokers and others to administrative law judges appointed by federal agencies, instead of trials in federal court, according to a top official.
The move comes as defense lawyers criticize the escalating use of administrative law judges by regulators pursuing financial wrongdoing, saying it eliminates an independent jury from the process. Securities and Exchange Commission officials have said previously they intend to more often use administrative proceedings for insider-trading and other complicated cases………………………………………..Full Article: Source

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To inject more liquidity, commodity market regulator raises position cap

Posted on 24 October 2014 by VRS  |  Email |Print

Commodity markets regulator Forward Markets Commission (FMC) has decided to allow hedgers, brokers and investors to take higher positions in futures contracts as part of its efforts to ensure more liquidity in the market.
In order to usher in more transparency in the market, the commission has asked the exchanges to display details of top traders on their websites. The revised norms, issued on Wednesday, have come into effect immediately………………………………………..Full Article: Source

India Looking at Merging Commodity Market Regulator With Sebi

Posted on 06 October 2014 by VRS  |  Email |Print

The government is considering a proposal to merge the Forward Markets Commission (FMC) with the Securities and Exchange Board of India (Sebi) to ensure better monitoring of the commodity futures market. “One of the options being considered by the government is merging FMC with Sebi,” a senior Finance Ministry official said.
Alternatively, the official said, the government may also pursue the long-pending proposal to give more powers to FMC by amending the Forward Contract Regulation Act (FCRA) Amendment Bill. While FMC is the regulator for commodities trading, Sebi regulates the capital markets………………………………………..Full Article: Source

US Commodities Regulator to Hold Public Bitcoin Hearing

Posted on 26 September 2014 by VRS  |  Email |Print

The US Commodity Futures Trading Commission (CFTC) has announced that it will hold a public meeting to discuss digital currencies on 9th October in Washington, DC. Created in 1975, the US CFTC is an independent federal agency that regulates the country’s futures and options markets. The meeting will be presided by the CFTC’s Global Market Advisory Committee, a group that advises the organisation on issues related to market integrity and competitiveness.
The CFTC indicated that the meeting will consist of two panels, one of which will focus on examining bitcoin and questions surrounding the CFTC’s involvement in the creation of a derivatives market for bitcoin, while the other will center on Non-Deliverable Forwards (NDFs), a form of cash-settled short-term forward contract………………………………………..Full Article: Source

Swiss NGO proposes commodities watchdog

Posted on 02 September 2014 by VRS  |  Email |Print

The non-governmental Berne Declaration group has called for the creation of an independent supervisory authority to oversee the Swiss commodities market. It says it is not good enough to allow the sector to regulate itself.
At the launch of its latest campaign to fight ongoing corruption, inequality and environmental issues in the worldwide commodities sector, the pressure group said an independent regulator would help counter the “resource curse”. “Switzerland as the world’s most important commodities hub has a political responsibility to act,” Andreas Missbach told a news conference on Monday………………………………………..Full Article: Source

U.S. case dismissal won’t dim regulatory glare for base metals sector

Posted on 02 September 2014 by VRS  |  Email |Print

Industrial metals will stay in sharp regulatory focus, even though a U.S. judge dismissed a high-profile case claiming that Wall Street banks and commodity merchants artificially inflated aluminum prices by restricting supply.
Users of the metal who launched the case are facing continued headaches about supplies as the warehouse backlogs they complained about are still largely in place, while sky-high surcharges remain for those wanting material immediately………………………………………..Full Article: Source

China allows 3 more banks including StanChart to import gold

Posted on 20 August 2014 by VRS  |  Email |Print

China has allowed three more banks, including a foreign lender, to import gold, sources with direct knowledge of the matter said, as the world’s top gold buyer gears up for its strongest effort yet to gain pricing power of the metal.
The move, which brings the number of firms allowed to import gold into China to 15, comes ahead of the launch in September of a new international bullion exchange in Shanghai with which China hopes to become a price-discovery centre………………………………………..Full Article: Source

EU regulators say Germany, others in breach of energy law

Posted on 14 August 2014 by VRS  |  Email |Print

EU regulators have begun legal proceedings against 24 member states, including Germany, for failing to enforce a law on energy efficiency, the European Commission said on Wednesday.
Energy saving has risen up the list of EU priorities since the conflict with the European Union’s biggest oil and gas supplier Russia over its actions in Ukraine increased concerns about energy security………………………………………..Full Article: Source

IEA says sanctions have low impact on Russian oil

Posted on 13 August 2014 by VRS  |  Email |Print

US and EU sanctions on Russia’s oil sector are unlikely to have a major effect on production, the International Energy Agency said on Tuesday, chiming with comments from some market watchers that the restrictions are toothless.
“Neither set of sanctions will have any tangible near term impact on supplies. Even for the medium term, their impact appears questionable,” the energy watchdog for wealthy nations said in its widely-followed monthly oil market report………………………………..Full Article: Source

Citi still sees opportunity in more regulated, less volatile commodities markets

Posted on 11 August 2014 by VRS  |  Email |Print

Citi is confident that it can run a lucrative commodities business in less volatile, more heavily regulated markets, the bank’s head of commodities sales told Metal Bulletin. Increasing compliance costs and low volatility have together driven margins in commodities banking progressively lower over the past few years and changed the landscape of the sector markedly, Citi’s José Cogullodo said in an interview.
With costs rising and order volumes falling, running a vanilla agency-style commodities brokerage is not an attractive proposition in the post-crisis, post-supercycle environment, he said. In addition, new regulations are prohibiting banks from trying to boost profits by trading commodities for their accounts. In any event, this is becoming less rewarding as commodity prices chop about in narrower ranges, he said…………………………………….Full Article: Source

CFTC shows U.S. commodity manipulation laws have teeth: Kemp

Posted on 08 August 2014 by VRS  |  Email |Print

By extracting a $13 million penalty and imposing tough restrictions on future oil trading by Arcadia and others, the U.S. Commodity Futures Trading Commission (CFTC) this week sent a powerful signal that laws against market manipulation still have teeth.
The case challenges a now famous view expressed in 1991 by commodities lawyer Jerry Markham that manipulation of commodity futures prices had become an unprosecutable crime………………………………………..Full Article: Source

Regulation becoming more burdensome for oil, gas independents

Posted on 05 August 2014 by VRS  |  Email |Print

Regulations over the past 5 years have made operations more complex for independent oil and gas producers, according to a recent survey, Profile of Independent Producers 2012-13, released by the Independent Petroleum Association of America. A vast majority of respondents indicated that regulations have resulted in increased administrative costs, with 48% reporting slight increases and 43% reporting significant increases.
Air pollution standards represented the most pressing concern for independents, as 33% said it had the largest impact on operations while 35% said it had the second-largest impact on operations………………………………………..Full Article: Source

After China port fraud probe, messy legal fight chills metal trade

Posted on 04 August 2014 by VRS  |  Email |Print

As global banks and trading houses fire off lawsuits over their estimated $900 million (534 million pounds) exposure to a suspected metal financing fraud in China, the tangled legal battle to recoup losses is set to drag on for years and hinder a swift recovery in metal trade.
HSBC is the latest bank to launch legal action since Chinese authorities started a probe into whether the firm at the centre of the allegations, Decheng Mining, used fake warehouse receipts to obtain multiple loans………………………………………..Full Article: Source

Energy Regulators Say EPA’s Climate Rule Poses Grid Challenges

Posted on 30 July 2014 by VRS  |  Email |Print

President Barack Obama’s proposed rule to curb carbon emissions from the nation’s power plants could raise costs and affect reliability in the U.S. electricity system, federal regulators told Congress.
But the commissioners of the Federal Energy Regulatory Commission, the government agency charged with overseeing the electric grid and other parts of the nation’s energy infrastructure, also said at a House hearing the government has a responsibility to act on climate change………………………………………..Full Article: Source

British government to help fund new oil regulator until 2022

Posted on 17 July 2014 by VRS  |  Email |Print

The British government announced on Wednesday another 3 million pounds ($5.14 million) a year in funding for the country’s new oil regulator until 2022, after which it will be fully financed by the industry.
The Oil and Gas Authority (OGA), which will be based in Aberdeen, Scotland, will be responsible for ensuring that oil explorers squeeze as much oil and gas out of Britain’s North Sea as possible. It is expected to start operating later this year………………………………………..Full Article: Source

India: Budget 2014: Gold import duty retained at 10 per cent; bullion markets surprised

Posted on 11 July 2014 by VRS  |  Email |Print

India surprised bullion markets by keeping the import duty on gold and silver unchanged at 10 per cent in its fiscal budget, a move likely to limit overseas purchases by the second-biggest bullion consumer and further encourage smuggling.
Indian gold futures jumped 2 per cent on Thursday, widening the premium over global prices which had narrowed on the expectation of a duty cut. India’s biggest gold trade group had said on Wednesday that the finance minister would likely cut the gold import duty to 6 per cent in the newly elected government’s first budget presentation………………………………………..Full Article: Source

Pentagon uses wrong oil price and fails to hedge fuel bill: Kemp

Posted on 10 July 2014 by VRS  |  Email |Print

The U.S. Department of Defense has been using the wrong oil price in its budget, leaving the largest single buyer of fuel in the world with liabilities potentially hitting billions of dollars. The Pentagon continues to rely on WTI prices even though Brent oil is more relevant to the cost of fuels it buys on behalf of the armed forces.
Using the wrong benchmark has introduced increasing risk into the military budget, according to a critical report published on Tuesday by the Government Accountability Office (GAO) (“Bulk Fuel Pricing: DOD needs to re-evaluate its approach to better manage the effect of market fluctuations”)………………………………………..Full Article: Source

UK watchdog says no evidence that gold price is rigged

Posted on 03 July 2014 by VRS  |  Email |Print

Collusion among banks in setting the gold price benchmark was possible but there is no evidence of this, a senior British regulator said on Wednesday when answering lawmakers’ questions on the trustworthiness of the gold market.
Gold prices and other benchmarks have come under scrutiny, with banks fined $6 billion for rigging the Libor interest rate, used to price a range of financial products. Allegations are also emerging of potential rigging of currency markets………………………………………..Full Article: Source

British MPs urge watchdog to probe price-rigging in gold market

Posted on 03 July 2014 by VRS  |  Email |Print

British MPs have called on the UK’s financial watchdog to investigate allegations of price-rigging in the London gold market after a senior regulatory executive said that there may have been co-ordinated attempts to manipulate a crucial benchmark.
Members of the influential parliamentary Treasury select committee pressed the Financial Conduct Authority to act after hearing evidence on Wednesday from gold market analysts who believe there is scope to rig the daily price-setting process and that it has probably been exploited frequently………………………………………..Full Article: Source

Metals Probe Not a ‘Fundamentally Significant Issue for the Industry’, says BHP

Posted on 03 July 2014 by VRS  |  Email |Print

BHP Billiton Ltd. played down fears that a probe into commodity-backed loans in China would have a lasting effect on the mining industry. Mike Henry, marketing president for BHP, said Wednesday that jitters about the investigation were overblown and that it hadn’t affected BHP or the broader industry “in any serious way.” BHP is the world’s largest miner by market value.
Metal traders recently warned China’s commodity imports could face an extended fall from near-record rates as banks withhold credit and customs officials tighten checks on incoming shipments. That followed allegations a Chinese trading company illegally pledged metals as collateral to more than one lender………………………………………..Full Article: Source

China, Singapore vie for Asia gold pricing alternative to London

Posted on 26 June 2014 by VRS  |  Email |Print

China and Singapore are vying to provide feasible gold price benchmarks in Asia, as calls grow in the top consuming region for more localized pricing of the precious metal at a time when the global benchmark is under regulatory scrutiny.
Singapore said at an industry conference on Wednesday it would launch a physical gold contract on an exchange to create a transparent form of pricing. China, at the same conference, said it wanted to have a bigger influence on the global gold market and would like to have its own price ‘fix’………………………………………..Full Article: Source

US commodities regulator wrestles hedgers and speculators

Posted on 23 June 2014 by VRS  |  Email |Print

A meeting on commodities regulation held in Washington this week at times felt like an argument among lexicographers. The words “hedger” and “speculator” have long had agreed definitions in commodities markets, so much so that the Commodity Futures Trading Commission publishes them in its online glossary.
But as the agency, prodded by the US Congress, attempts to impose a new rule constraining speculators, the yin-yang nature of these two types of traders is blurring into grey………………………………………..Full Article: Source

CFTC rules risk hedging commodities – experts

Posted on 20 June 2014 by VRS  |  Email |Print

A panel of commodities traders have warned the CFTC it could hurt end users. Commodities experts have rallied against a plan by the US derivatives watchdog to limit speculative positions on commodities, arguing the rules would harm legitimate end users who use the products to hedge.
The US Commodity Futures Trading Commission (CFTC) hosted a public roundtable on Thursday comprising all five members of the agency, including the new chairman Timothy Massad. But experts at the roundtable argued that the commission does not understand the complexity of physical commodity hedging, and called for a hedging exemption for corporates and end-users to allow them to manage their risk effectively, free from unnecessary regulation………………………………………..Full Article: Source

Regulator Investigates Controls at Deutsche Bank Commodities Unit

Posted on 20 June 2014 by VRS  |  Email |Print

Germany’s top financial regulator recently investigated internal controls at Deutsche Bank AG’s commodities unit, according to a person familiar with the probe. The regulator, BaFin, sent a letter to the bank outlining its findings in April, this person said. It’s not known whether the regulator found deficiencies in the bank’s processes or instructed the bank to make any changes. It is also not known what prompted the investigation.
Deutsche Bank AG said in December that it would exit most of its commodities trading business. Changes to bank regulations have made it tougher for banks to generate profits from commodities trading………………………………………..Full Article: Source

Forward Markets Commission working on single clearance for commodity exchanges

Posted on 17 June 2014 by VRS  |  Email |Print

The Forward Markets Commission has set up a working group to prepare a roadmap and a structure for a common clearing system for all commodity exchanges in the country in order to reduce transaction costs of market participants and strengthen risk management systems.
The commodity markets regulator announced this in an office memorandum on Monday. The move comes in the backdrop of the payment crisis involving the National Spot Exchange Ltd that broke out in July last year when the exchange could not settle contracts………………………………………..Full Article: Source

China Commodity Loans Add to Surge in Offshore Borrowing

Posted on 13 June 2014 by VRS  |  Email |Print

The commodity-backed loans at the center of a probe into an alleged financial scam at a Chinese port are part of a ramp-up in offshore borrowing by Chinese companies that Beijing is looking to tamp down.
As Chinese authorities tightened credit at home in the past year, local firms instead looked abroad for financing. Asian-Pacific banks alone had $1.2 trillion in loan exposure to China at the end of 2013, up two-and-a-half times from 2010, according to Fitch Ratings………………………………………..Full Article: Source

FMC sets new norms for commodity exchanges

Posted on 13 June 2014 by VRS  |  Email |Print

Commodity market regulator Forward Markets Commission has amended regulations for corporate governance and independent director in commodity exchange. The regulator has now aligned the norms in line with the new Companies Act.
The new FMC norms lays emphasise on appointment of different committees to assist the management take decisions. To start with, it has suggested formation of eight committees, including the one on technology………………………………………..Full Article: Source

Commodities Regulator Names New Enforcement Chief

Posted on 11 June 2014 by VRS  |  Email |Print

Wall Street’s smallest regulator has hired a big-name enforcement director. The Commodity Futures Trading Commission announced on Tuesday that Aitan D. Goelman, a former federal prosecutor turned white-collar defense lawyer, would become the head of its enforcement division. Mr. Goelman, a 45-year-old trial lawyer, will join the agency from the Washington office of Zuckerman Spaeder, where he is a partner.
“He will be a tough, aggressive and fair leader at a critical time in the commission’s history,” Timothy G. Massad, who became chairman of the agency last week, said in a statement………………………………………..Full Article: Source

Worries Hit Commodity Finance Sector as China Opens Investigation

Posted on 10 June 2014 by VRS  |  Email |Print

Is the metal stored in a Chinese warehouse really there? Has the peanut oil shipment that a bank loaned money against been swapped for worthless water? Basic questions like these have begun to play on the minds of traders and bankers doing business in China, the world’s largest importer of raw materials, after an investigation began at Qingdao Port, a huge trading hub in the northeast, into whether more than one license had been issued for the same material.
The duplication, which leaves buyers out of pocket when they claim what they thought was theirs, may be a result of deliberate fraud by a company using the same metal to raise multiple loans………………………………………..Full Article: Source

India commodity regulator seeks more position disclosures

Posted on 05 June 2014 by VRS  |  Email |Print

The commodity markets regulator has launched a fresh attempt to rebuild volume on domestic commodities exchanges, after their credibility was dented by last year’s failure of the National Spot Exchange.
The regulator said it had asked its capital market counterpart to require companies to disclose their commodity trading positions on domestic futures markets, seeing this as a way of boosting the credibility of those markets, in turn boosting activity. Volumes at the commodity exchanges tumbled after NSEL, an exchange run by promoters of the Multi Commodity Exchange defaulted on payments………………………………………..Full Article: Source

Commex norms to be in sync with Companies Act: FMC

Posted on 28 May 2014 by VRS  |  Email |Print

The Forward Markets Commission is considering a slew of measures to improve the governance of and increase participation in the commodities market. “We will come out with board-of-director norms on the same lines as the current corporate governance norms and the Companies Act,” said a senior FMC official.
As a part of these guidelines, FMC will conduct a performance evaluation of all directors, including independent ones, on company boards. Also, independent directors might hold separate board meetings to decide on board decisions that might serve the interest of promoters alone………………………………………..Full Article: Source

U.S. Oil-Export Ban Is Under Review

Posted on 14 May 2014 by VRS  |  Email |Print

Top Obama administration officials are considering relaxing federal laws banning crude-oil exports, a move that would upend decades-old policy, cause a political stir in Washington and sway the global oil market.
U.S. Energy Secretary Ernest Moniz said Tuesday that some of the fast-growing supply of domestically produced oil isn’t suitable for refining locally, which could warrant re-examining a nearly 40-year-old law that bans exports of most crude………………………………………..Full Article: Source

FMC tightens commodity exchange investment norms

Posted on 07 May 2014 by VRS  |  Email |Print

Tightening shareholding norms of commodity exchanges after the National Spot Exchange (NSEL) crisis, the Forward Markets Commission (FMC), on Tuesday, said no resident individual could hold more than 5 per cent stake in them and scrapped the concept of promoters and anchor investors for such bourses.
In an eight-page document laying out shareholding norms for national-level commodity exchanges, the FMC said at least 51 per cent of the shares of any commodity exchange will have to be held by the public. This is to ensure broader participation in commodity bourses………………………………………..Full Article: Source

U.S. commodity regulators looking into banks’ swaps move

Posted on 30 April 2014 by VRS  |  Email |Print

U.S. commodity regulators are inquiring about Wall Street banks’ recent push to remove parent-company backing of some overseas swaps. Scott O’Malia, a Republican commissioner at the Commodity Futures Trading Commission, said in an interview he has asked the agency’s acting chairman, Mark Wetjen, a Democrat, to issue a legal opinion as to whether any of the banks’ exercises have run afoul of the agency’s rules.
On Sunday, The Wall Street Journal reported that banks, including Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley, were changing the terms of some swaps made by their offshore units so they could avoid U.S. regulations, according to people familiar with the situation………………………………………..Full Article: Source

Is enough being done to regulate global commodity markets?

Posted on 28 April 2014 by VRS  |  Email |Print

Commodity markets are becoming interconnected, with large global financial investors choosing to invest directly in these markets. With this comes the question of how one is to regulate markets which are truly global, with investors many a time being from outside national regulatory jurisdictions.
All these issues have been acknowledged by the G-20 and governments, and regulations will have to be made keeping in mind the constantly changing trading strategies in commodity markets that are increasingly becoming systemically important………………………………………..Full Article: Source

IEE can determine regional oil price

Posted on 11 April 2014 by VRS  |  Email |Print

Iran Energy Exchange (IEE) has the potential of playing a key role in determining oil price in the region, Managing Director of Iran Energy Exchange Ali Hosseini said on Wednesday.Talking to IRNA, Hosseini noted that since Iran is an oil-rich country, IEE has the potential of increasing supplies from the current 3,000 barrels per day to 10,000 bpd.
“Iran aims to prepare the ground for the presence of foreign buyers of crude oil in the energy exchange and diversify products supplied to buyers, including gas condensate,” he said.The first crude oil transaction at Iran Energy Exchange took place on April 6………………………………………..Full Article: Source

U.S. bank regulator issues bulletin on oil, gas lending risks

Posted on 10 April 2014 by VRS  |  Email |Print

A U.S. regulatory agency on Wednesday issued tips for bankers and examiners on potential risks involved with loans for oil and natural gas production, as the domestic energy boom continues.
The U.S. Office of the Comptroller of the Currency (OCC) published on its website a bulletin laying out supervisors’ expectations for energy production lending and spelling out new examination procedures for banks issuing the loans………………………………………..Full Article: Source

Key senator says U.S. office can lift part of oil export ban

Posted on 03 April 2014 by VRS  |  Email |Print

A U.S. government office has the power to approve exports of an abundant type of petroleum and help energy companies begin to partially bypass a 40-year ban on crude exports, according to a report released on Tuesday by Lisa Murkowski, the top Republican on the Senate Energy and Natural Resources Committee.
The ban on crude exports the government put in place after the Arab oil embargo of the 1970s includes a prohibition on exports of unprocessed condensate, a light petroleum that appears in oil reservoirs as a gas, but condenses to a liquid when it leaves the well…………………………………Full Article: Source

BP warns of regulatory hit to commodities prices

Posted on 02 April 2014 by VRS  |  Email |Print

The head of one of the world’s biggest energy trader has said some of the regulation being imposed on financial markets could have “very worrying” side effects on commodities prices.
Paul Reed, chief executive of BP’s integrated supply and trading division identified a range of new threats from new regulations, including higher capital requirements and a push to using clearing houses to settle trades………………………….Full Article: Source

FMC likely to ease price limits for agricultural commodities soon

Posted on 24 March 2014 by VRS  |  Email |Print

Commodity market regulator Forward Markets Commission may relax the daily price limit for agricultural commodities on the futures platform. This will be in line with that of non-agricultural commodities such as bullion, metals and energy traded on the exchanges.
Currently, agricultural commodities have a maximum daily price limit of four per cent on both the upper and lower sides. In contrast, bullion and other non-agricultural commodities, the first price limit is six per cent. It gets extended subsequently by three per cent, with a cooling period of 15 minutes………………………………………..Full Article: Source

How Obama’s 2015 budget proposal will affect commodities

Posted on 07 March 2014 by VRS  |  Email |Print

Earlier this week, President Obama unveiled his budget proposal for the year beginning October 1. The proposed 2015 budget totals $3.9 trillion, including certain tax increases, as well as budget cuts and increases across nearly all departments. A closer look at the breakdown of Obama’s budget reveals several key factors commodity traders and investors should be aware of — particularly for the energy and agriculture industries.
In the President’s message, Obama stated “We also know that one of the biggest factors in bringing more jobs back is our commitment to American energy… The Budget advances this strategy by ensuring the safe and responsible production of natural gas and cleaner electricity generation from fossil fuels.” In regard to agriculture, however, the President’s outlined budget is significantly smaller than last year………………………………………..Full Article: Source

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