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JPMorgan to pay $100-mln to settle with commodities regulator on Whale trades

Posted on 17 October 2013 by VRS  |  Email |Print

JPMorgan Chase & Co agreed to pay $100-million and admit its traders acted recklessly to settle one more set of U.S. charges over its disastrous “London Whale” trade, the Commodity Futures Trading Commission announced on Wednesday.
Last month the bank paid $920-million to four other U.S. and British regulators to resolve civil probes of the bank’s $6.2-billion in derivative losses involving its chief investment office………………………………………..Full Article: Source

NSEL, FTIL entities barred from commodities auctions

Posted on 04 October 2013 by VRS  |  Email |Print

The Forward Markets Commission (FMC) on Thursday banned group entities and associate concerns of the National Spot Exchange Ltd (NSEL) and its parent Financial Technologies (India) Ltd (FTIL) from participating in auctions of commodities and assets.
Board members and employees of both the companies have also been barred from the auctions. The letter addressed to NSEL chief executive officer and managing director, Saji Cherian, referred to the recent auction of castor seeds and sugar conducted by the spot exchange………………………………………..Full Article: Source

Commodity benchmarks could be subject to tighter FCA rules

Posted on 03 October 2013 by VRS  |  Email |Print

Commodity benchmarks, such as those used for gold and oil, could be subject to tougher regulation in the wake of the Libor scandal. According to a report in the Financial Times key resource barometers could fall under the eye of the regulator.
At a conference in Rome FCA technical specialist Don Groves admitted he would not be surprised if the UK Government did take some form of action………………………………………..Full Article: Source

Fed said to review commodities at Goldman, Morgan Stanley

Posted on 02 October 2013 by VRS  |  Email |Print

The Federal Reserve has expanded its scrutiny of banks’ physical commodities operations to encompass businesses run by Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) that Congress had previously authorized.
The Fed is examining all legal and regulatory exemptions that allow banks to participate in the commodities markets, said a person briefed on the process who asked not to be named because the review is confidential. The appraisal, intended to minimize potential risks to the financial system, widened since the Fed said in July that it’s reconsidering its landmark 2003 decision to grant some lenders, such as Citigroup Inc. (C) and JPMorgan Chase & Co., permission to expand into raw materials………………………………………..Full Article: Source

Swiss to vote on ban for speculation in agricultural commods

Posted on 02 October 2013 by VRS  |  Email |Print

Switzerland is obliged to hold a vote on banning speculation in agricultural commodities after a left wing political initiative gained enough signatures to force it to under Swiss law.
The timing of the national vote is not clear and is pending official guidance from the government. Under the Swiss system, parliament can propose alternative legislation which is typically more moderate and also subject to a national vote………………………………………..Full Article: Source

More regulatory angst over physical commodities and banks

Posted on 30 September 2013 by VRS  |  Email |Print

Should Goldman Sachs stay in physical commodities? Once the controversy really got hot, JPMorgan wasted no time in announcing that it would exit the business of physically storing metals commodities. The issue is alive for other banks, notably Goldman Sachs, which has taken its lumps over its controversial Metro warehousing facility in Detroit.
Reuters notes that regulators have some big decisions to make. First, the Federal Reserve must decide whether former investment banks Goldman Sachs and Morgan Stanley will “be allowed to continue owning and operating physical assets like oil pipelines and metal warehouses.” ……………………………………….Full Article: Source

Fed tapering to hurt commodity markets: Nouriel Roubini

Posted on 27 September 2013 by VRS  |  Email |Print

There are a number of factors as to why the commodity super cycle is probably over. First of all, China is slowing down. Their growth rate might be as low as 6% or 7%. Additionally, we have a slow recovery in advanced economies and since there the monetary policy is going to be tightened, however, gradual.

The Fed eventually is going to start tapering, would eventually go away from zero policy rates and that increase in short and long rates is going to soften commodity prices as well. The dollar is going to strengthen over time because economic growth in the US is going to outperform the one in other advanced economies. The Fed is going to exit faster than other central banks………………………………………..Full Article: Source

Why Indians love it when government makes gold expensive

Posted on 26 September 2013 by VRS  |  Email |Print

Government of India makes gold more expensive by hiking duties four times in 20 months, hoping this will deter citizens of India from holding more gold. But not only does gold remain attractive for Indians, expectations of a high price regime have increased its attractiveness.
This is not a perverse outcome. It’s more a case of wrong official logic. Economics 101 says high prices dampen demand for a product or a service. But Investing 101 says expectations that an asset class will get pricier can increase demand for that asset. Gold is an asset class………………………………………..Full Article: Source

Silver price-manipulation probe closes

Posted on 26 September 2013 by VRS  |  Email |Print

U.S. commodity regulators closed a five-year-long investigation of silver-market manipulation claims without filing charges, the latest setback for authorities cracking down on alleged trading abuses.
The Commodities Futures Trading Commission said there is no “viable basis” for a case that had its roots in emails commissioners received from investors amid market volatility in 2008. The decision to close the case amounts to a victory for J.P. Morgan Chase, a large silver trader that was the subject of manipulation allegations………………………………………..Full Article: Source

India to strengthen corporate governance of commodity exchanges

Posted on 24 September 2013 by VRS  |  Email |Print

India’s commodity regulator has moved to strengthen corporate governance of commodity exchanges by issuing guidelines to restrict board representation by promoter members. Under the guidelines, a promoter of an exchange cannot have board representation higher than their total shareholding, capped at 26 percent at the end of the fifth year of operation, the Forwards Market Commission said.
These revised guidelines follow the National Spot Exchange Ltd (NSEL), MCX-SX’s affiliated commodity exchange, abruptly suspending trading in August. NSEL has since struggled to square off outstanding contracts worth over 55 billion rupees ($868.81 million)…………………………………..Full Article: Source

Commodities may benefit from QE second wind, but it isn’t a one-way street

Posted on 20 September 2013 by VRS  |  Email |Print

The US Federal Reserve has said it will continue with its monthly bond-buying programme (quantitative easing or QE), boosting investor sentiment worldwide because the liquidity tap remains open for now.
What does this mean for commodities, especially metals? Easy liquidity conditions had propped up commodity prices, even when economic conditions were turning weak. But the potential threat to liquidity, from a Fed taper, had resulted in commodity prices retreating after May. This was particularly visible in non-ferrous metal prices. But prices have recovered since August despite the threat of a tapering due to improving economic conditions in parts of the world………………………………………Full Article: Source

Fed tapering and commodities

Posted on 20 September 2013 by VRS  |  Email |Print

As the Fed considers announces the delay of QE tapering Edith Southammakosane, senior analyst at ETF Securities, explains what this means for commodities.
“The Fed’s decision to maintain its existing policy surprised the audience yesterday as the market expected tapering to start this month. Most asset classes immediately reacted positively to the announcement. The S&P 500 rallied nearly 1% while Eurostoxx 50 jumped 1.3%. Commodity prices also saw immediate gains, with the price of gold surging 3.8% and the price of copper gaining 1.2%………………………………………Full Article: Source

India: Govt may consider Sebi-like regulations for commodities market

Posted on 20 September 2013 by VRS  |  Email |Print

As a multi-agency probe continues into the Rs 5,600-crore payment crisis at National Spot Exchange Ltd (NSEL), the government may consider streamlining the norms for commodities and capital markets, regulated by FMC and Sebi, respectively, to plug potential regulatory gaps.
The idea is to make the regulations governing commodity derivatives markets much more stringent and bring them at par with the norms applicable for Sebi-regulated capital markets, sources said………………………………………Full Article: Source

India bans trading in non-farm commodities on Saturdays

Posted on 19 September 2013 by VRS  |  Email |Print

India’s commodity market regulator Wednesday asked the country’s six national-level commodity exchanges to stop futures trading in non-agriculture commodities on Saturdays, as it is the global practice.
Commodity exchanges in India currently allow trading on Saturdays for four hours, compared with seven hours for agriculture commodities and 14 hours for non-agriculture commodities during week days………………………………………..Full Article: Source

India bans trading in non-farm commodities on Saturdays

Posted on 19 September 2013 by VRS  |  Email |Print

India’s commodity market regulator Wednesday asked the country’s six national-level commodity exchanges to stop futures trading in non-agriculture commodities on Saturdays, as it is the global practice.
Commodity exchanges in India currently allow trading on Saturdays for four hours, compared with seven hours for agriculture commodities and 14 hours for non-agriculture commodities during week days………………………………………..Full Article: Source

Fed bond-buying pullback could undermine commodities

Posted on 18 September 2013 by VRS  |  Email |Print

If the Federal Reserve pulls back on its bond buying, the central bank’s actions could further undermine the case for investing commodities, which have been battered by excess supplies and souring sentiment.
The Dow Jones-UBS Commodity Futures Index has dropped 7.9% since the start of the year as investors have sought out stocks and other higher-yielding assets. This is in sharp contrast to 2009, when the index rose 19% partly on the Fed’s post-crisis stimulus efforts………………………………………..Full Article: Source

Fixing commodity trading: Amend and pass new regulatory framework

Posted on 18 September 2013 by VRS  |  Email |Print

The transfer of administrative control of the regulator for commodity trading, the Forward Markets Commission (FMC), from the consumer affairs ministry to the finance ministry seems a typical government response to a crisis like the one besetting the National Spot Exchange Ltd (NSEL).
But it is a sensible step that should have been taken much earlier, although it will not suffice to regulate exchange-based commodity trading - be it spot trading or forward trading. That requires a strong and autonomous regulator with sufficient expertise and infrastructure, as well as the authority to take expeditious action and effectively enforce its orders. The FMC currently lacks all these………………………………………..Full Article: Source

FMC widens risk management group to include Sebi, BSE members

Posted on 17 September 2013 by VRS  |  Email |Print

The Forward Markets Commission (FMC) today widened the Risk Management Group to include a member each from Sebi, BSE and IFFCO, among others, as it tackles the growing challenges of risks associated with commodity futures trading after the NSEL crisis.
The Risk Management Group (RMG) was set up in February 2005 to assist the FMC in formulating risk management policies and guidelines for the commodities derivatives market. The group was last reconstituted in March 2007………………………………………..Full Article: Source

U.S. swaps regulator seeks bank openness on commodities

Posted on 16 September 2013 by VRS  |  Email |Print

Regulators should have better insight into the commodity businesses owned by large Wall Street banks to help them prevent market manipulation, a senior official at the U.S. derivatives watchdog said.
The Federal Reserve is reviewing an exception that has allowed banks to trade physical commodities and even own metals warehouses and oil tankers despite a law that prohibits the mingling of finance and commerce. But Bart Chilton, a member of the Commodity Futures Trading Commission which regulates swaps and futures, said his agency did not even know exactly what the banks owned………………………………………..Full Article: Source

Banks face physical commodity curbs

Posted on 11 September 2013 by VRS  |  Email |Print

Wall Street is bracing for a ruling that may hasten the exit of J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley from businesses such as metals warehousing, oil shipping and power generation. Financial-industry executives expect the Federal Reserve to issue guidelines as soon as this month limiting bank participation in so-called physical-commodities businesses.
The decision would mark a significant step in the government’s effort to curtail risky activities on Wall Street, forcing large financial companies to dismantle franchises a decade or more in the making. The rules would apply to all U.S. banking companies………………………………………..Full Article: Source

EC poised to row back on commodities benchmarks

Posted on 09 September 2013 by VRS  |  Email |Print

The European Commission looks set to row back on a number of controversial proposals to regulate commodities benchmarks, contained within its wider benchmark reform, after an industry backlash arguing the new rules would make the market more opaque. The final text on benchmarks, which is due to be published on September 18, is no longer expected to contain an earlier proposal to hold contributors liable for their submissions to commodities benchmarks, according to two sources close to the talks.
Trading in commodities is largely over the counter and relies on submissions from traders to price-reporting agencies, such as Platts. Market participants have argued that if contributors could potentially be penalized for the submissions they make, fewer would do so, reducing transparency……………………………………….Full Article: Source

India: Bid to bring FMC under finance fold

Posted on 09 September 2013 by VRS  |  Email |Print

The government plans to bring the Forward Markets Commission (FMC) under the finance ministry and then consider making it an arm of market regulator Sebi, following the payment crisis at NSEL.
The government is also taking a close look at whether hawala, or illegal money, was used in trading at NSEL — a bourse which seemed to have taken bids far more than the underlying commodities and for longer time frames than allowed. The two groups appointed by the Centre to probe the crisis are expected to submit their reports next week………………………………………..Full Article: Source

Exchanges responsible for delivery: FMC

Posted on 03 September 2013 by VRS  |  Email |Print

FMC has also directed the exchanges to ensure that all the existing FMC accredited warehouses get registered by 31 Dec. Commodities markets regulator Forward Markets Commission (FMC) on Monday said commodity future exchanges are responsible for ensuring the settlement of outstanding forward contracts by way of delivery.
Forward Contract Regulation Act, 1952, requires all forward contracts to be delivery-based. Without mentioning any exchange, FMC said “it has been observed that some of the exchanges have issued circulars to their trading members and other market participants in which conscious efforts have been made to evade their prime responsibility of ensuring quality and quantity of commodities as per the prescribed contract specification, and to pass on the entire onus to the warehouse service providers, which is not correct”………………………………………..Full Article: Source

China to exempt some commodities imports from licence requirements

Posted on 29 August 2013 by VRS  |  Email |Print

China will do away with licence requirements for imports of some commodities, including refined copper, stainless steel and natural gas, from September 1 as part of broader moves to cut red tape and open up its commodities markets.
Products exempt from the import license requirement also include semi-finished copper products, scrap copper, scrap aluminium, steel, steel products and some agricultural products, according to a statement posted on the Ministry of Commerce website on Tuesday………………………………………..Full Article: Source

FMC tightens commodity exchange screws

Posted on 21 August 2013 by VRS  |  Email |Print

The crisis at the National Spot Exchange have brought things to a head, and the Forward Market Commission, which regulates commodity exchanges, is taking a hard line when it comes to compliance with its directives.
The commodities exchange regulator has been working on plugging regulatory gaps in these exchanges for a few months now. The hue-and-cry created by the NSEL crisis has only strengthened the FMC’s resolve to crack the whip to ensure that all 6 commodity exchanges in the country conform to its ‘fit & proper’ management guidelines………………………………………..Full Article: Source

Banks’ physical commodity trading comes under scrutiny

Posted on 21 August 2013 by VRS  |  Email |Print

Amid a review of a 2003 determination by the Federal Reserve, the involvement of US banks in physical commodities has come under fire from regulators, politicians and the media. Could they really be forced to exit physical trading?
During the last two weeks of July, many Wall Street executives were undoubtedly looking forward to a much-needed summer break. But instead, bank commodity chiefs found themselves engulfed in a maelstrom of criticism about their firms’ involvement in physical commodities………………………………………..Full Article: Source

Regulators examine aluminum warehousing

Posted on 13 August 2013 by VRS  |  Email |Print

Federal regulators have begun an investigation into whether some Wall Street banks artificially inflated the cost of aluminum and other metals at the expense of end users and consumers, according to people familiar with the matter.
Commodity Futures Trading Commission enforcement officials sent subpoenas last week to firms responsible for storing and delivering aluminum, including Goldman Sachs Group Inc. and J.P. Morgan Chase & Co., seeking documents related to their commodities operations as far back as January 2010, the people said………………………………………..Full Article: Source

Regulators to test commodities bankers’ mettle

Posted on 12 August 2013 by VRS  |  Email |Print

The growing involvement of banks in commodities markets is finally being placed under the microscope. Next month the US Federal Reserve is expected to report on whether it will allow US banks to continue with their current involvement in the commodity markets. Its action could well prompt governments around the world to follow the lead.
Metals, energy and soft commodities are all now heavily influenced by the activities of banks: whether it is financing, physical trading, warehousing or derivatives. Most of these areas are unregulated and opaque and thus render the banks open to allegations of conflicts of interest and abuse………………………………………..Full Article: Source

Why are JPMorgan and Goldman being accused of price manipulation?

Posted on 08 August 2013 by VRS  |  Email |Print

Regulators have had the financial industry under a microscope since the late-2000s crisis, and every time they turn over a stone they seem to find something to litigate or regulate. Most recently, mega-banks like Goldman Sachs and JP Morgan have come under fire for allegedly shady business practices regarding their ownership of commodities storage facilities.
The New York Times called attention to some suspicious behavior from Goldman Sachs in July. The bank was accused of using a fleet of trucks to move 1,500-pound bars of aluminum between warehouses, thereby lengthening the storage time of the commodity and increasing the prices paid by manufacturers and consumers across the country, thus adding millions of dollars per year to the company’s coffers………………………………………..Full Article: Source

Fed should reverse commodity policy, CFTC’s Chilton says

Posted on 06 August 2013 by VRS  |  Email |Print

The Federal Reserve should reverse a decade-old ruling that lets banks trade physical commodities, Commodity Futures Trading Commission member Bart Chilton said.
“I don’t want a bank owning an electric service, or cotton, corn or feedlots,” Chilton, a Democrat, said in remarks prepared for delivery today at a conference of U.S. cotton growers in Lake Tahoe, California. “I don’t want banks owning warehouses, whether they have aluminum, gold, silver or anything else in them.” The Fed “can and should reverse” the policy, he said………………………………………..Full Article: Source

India: Do commodity markets need better regulation?

Posted on 02 August 2013 by VRS  |  Email |Print

The recent woes of National Spot Exchange Ltd (NSEL) have put the spotlight on the world of commodity trading. The exchange has had to abruptly suspend trading in a large number of its contracts as well as defer the settlement of trades that have already been executed. This resulted in rumours of a settlement crisis, leading to a 66% drop in NSEL’s parent company, Financial Technologies (India) Ltd’s (FTIL) shares.
The fear was that FTIL might have to make good NSEL’s settlement obligations, but according to the head of a large domestic trading house, the exchange is essentially facing a liquidity crisis…………………………………..Full Article: Source

Platts says commodity-price transparency at risk from regulation

Posted on 01 August 2013 by VRS  |  Email |Print

Increased regulation of methods used to establish commodities prices could backfire by reducing transparency as market participants may stop giving information, according to Platts, a price publisher.
“Commodity-price discovery depends on the voluntary participation of traders, producers and other market players,” the unit of McGraw Hill Financial Inc. (MHFI) said in an e-mailed response to questions. “Regulation could have the inadvertent consequence of inhibiting participation in the price-assessment process which would, in turn, decrease transparency, thus having the opposite effect of regulators’ intentions.”……………………………………….Full Article: Source

Commodities manipulators, the eyes of government are upon you (from now on)

Posted on 01 August 2013 by VRS  |  Email |Print

United States regulators the Commodity Futures Trading Commission and the Securities and Exchange Commission plan to look more closely at banks’ commodities holdings in an effort to ensure the banks are not manipulating those markets.
According to a report by Bloomberg, CFTC Chairman Gary Gensler and SEC Chairman Mary Jo White both told the US Senate Banking Committee that their agencies have the authority to investigate those businesses. Senator Sherrod Brown, a Democrat from Ohio, has led the latest round of questions about banks’ activities, in particular focusing on Goldman Sachs and how it may have unfairly manipulated aluminum prices, as described by Doug Buchanan of Columbus Business First………………………………………..Full Article: Source

U.S. deepens scrutiny of banks’ roles in commodities

Posted on 31 July 2013 by VRS  |  Email |Print

Wall Street banks face the prospect of increased scrutiny of their commodity businesses as U.S. regulators and lawmakers on Tuesday pressed for a closer look at their roles in owning warehouses and in trading everything from oil to metals
Under pressure from a handful of lawmakers to explain why banks including JPMorgan Chase & Co. and Goldman Sachs have been allowed to own warehouses and trade physical commodities, regulators have scrambled this month to demonstrate that they are tackling the issue………………………………………..Full Article: Source

Senate panel opens probe of banks’ commodities businesses

Posted on 31 July 2013 by VRS  |  Email |Print

A U.S. Senate panel known for hard-hitting investigations of Wall Street and financial markets has launched a preliminary examination into potential conflicts of interest posed by banks’ role in physical commodity markets, according to people familiar with the matter.
The U.S. Senate Permanent Subcommittee on Investigations, led by Sen. Carl Levin (D.,Mich.), has sent information requests in recent months to banking giants J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, as well as their primary regulator, the Federal Reserve, one of the sources said………………………………………..Full Article: Source

Regulators face scrutiny on banks’ commodities at senate hearing

Posted on 30 July 2013 by VRS  |  Email |Print

U.S. banks’ ownership and trading of physical commodities will face further scrutiny tomorrow when the heads of the Commodity Futures Trading Commission and Securities and Exchange Commission testify before lawmakers.
Senator Sherrod Brown, the Ohio Democrat who led a hearing on the issue last week, said he plans to question the CFTC’s Gary Gensler and the SEC’s Mary Jo White on their oversight when the two chairman appear before the chamber’s Banking Committee on implementation of Dodd-Frank Act reforms…………………………………Full Article: Source

JPMorgan commodities exit: Regulation or revenues to blame?

Posted on 29 July 2013 by VRS  |  Email |Print

JPMorgan has been feeling the pressure regarding its commodities business from U.S. lawmakers, and on Friday the company announced it would be downsizing this aspect of its operations. The Wall Street Journal reports that JPMorgan is putting up warehouses and other physical properties for sale, though it is unclear whether the motivation is declining revenues or heightened regulation.
On the regulation front, JPMorgan had another opportunity to hear from Washington lawmakers earlier this week. Senator Sherrod Brown (D-Ohio) held hearings on the issue of precious metal storage, power plant ownership, and other key components of the biggest banks’ commodities business on Tuesday………………………………………..Full Article: Source

U.S. probes metals warehouse firms

Posted on 26 July 2013 by VRS  |  Email |Print

The U.S. government is stepping up scrutiny of firms that own metals warehouses amid concerns of possible price manipulation and collusion, according to people familiar with the matter.
The Commodity Futures Trading Commission and the Justice Department have begun preliminary investigations of the metals warehousing industry, which stores physical commodities such as copper, aluminum and zinc, these people said………………………………………..Full Article: Source

U.S. scrutiny for commodities market

Posted on 24 July 2013 by VRS  |  Email |Print

Wall Street’s lucrative commodities businesses came to the fore here Tuesday as a Senate panel questioned whether banks should be allowed to control warehouses, pipelines and other infrastructure used to store and transport essential goods.
The hearing, convened by the Senate Financial Institutions and Consumer Protection subcommittee, came as Goldman Sachs, JPMorgan Chase and others face growing scrutiny over their role in the commodities markets and the extent to which their activities can inflate prices paid by manufacturers and consumers. The Federal Reserve is reviewing the potential risks posed by the operations, which have generated many billions of dollars in profits for the banks………………………………………..Full Article: Source

Biggest banks face Fed restoring barriers in commodities

Posted on 24 July 2013 by VRS  |  Email |Print

The Federal Reserve’s review of its decision to let banks store, transport and trade raw materials signals a potential rebuilding of the wall between banking and commerce that legislation and rulemaking have eroded.
The central bank said July 19 that it’s reviewing a decade-old decision that physical commodities are “complementary” to banking, allowing lenders such as Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) to operate in both industries. Goldman Sachs Group Inc. (GS) and Morgan Stanley may be less at risk from the review as some businesses owned before the firms became bank holding companies in 2008 are grandfathered………………………………………..Full Article: Source

Wall Street reshapes commodities business to fend off regulation

Posted on 23 July 2013 by VRS  |  Email |Print

Wall Street’s most powerful banks have accelerated efforts to transform the structure and focus of their commodity trading desks to preserve their multibillion-dollar empires from tightening regulation.
Scrutiny of their activities in electricity markets, metals warehousing and oil trading is reaching fever pitch ahead of a Federal Reserve decision in September that may decide how deeply banks can delve into the world of gasoline tankers, piles of copper and power plants………………………………………..Full Article: Source

Senate panel to peek inside bank commodities operations

Posted on 23 July 2013 by VRS  |  Email |Print

If you’re wondering why a few very large banks in the United States play such a big role in the commodities markets, you aren’t alone. Most people reading the New York Times’ article on Goldman’s weird, confusing and very profitable role in warehousing aluminum probably found themselves scratching their heads a bit.
Traditionally, banks in the United States were kept out of commercial business. The reason for the separation of commerce and finance was two-fold: to protect the soundness of the financial system from turbulence in the broader economy and to protect the broader economy from being dominated by finance………………………………………..Full Article: Source

US watchdog acts on metals warehousing

Posted on 23 July 2013 by VRS  |  Email |Print

The US commodity futures watchdog has sent letters to metals warehouse owners demanding they preserve records, in a sign of a looming regulatory probe of their storage practices.
Warehouses where metals such as aluminium, copper and zinc are stored have been a target of consumers from Coca-Cola to General Motors, who complain that long queues to remove metal distort prices………………………………………..Full Article: Source

Senate to look at banks’ control of commodity storage

Posted on 18 July 2013 by VRS  |  Email |Print

A U.S. Senate committee will hold a hearing next week on whether banks should control physical storage of commodities, the HuffingtonPost reported, a signal that lawmakers may toughen their stance on this controversial but lucrative business for Wall Street firms.
Goldman Sachs Group Inc, JP Morgan Chase & Co and Morgan Stanley all have business units involved in the storage of physical commodities such as metals and oil, as well as being involved in commodities trading………………………………………..Full Article: Source

U.K. regulators consider criminal probe into oil-price fixing

Posted on 16 July 2013 by VRS  |  Email |Print

The U.K. antitrust regulator is considering a criminal probe into oil-price manipulation as European Union officials conduct a civil investigation. The Office of Fair Trading is liaising with U.K. agencies including the Serious Fraud Office and Financial Conduct Authority “to establish whether there is sufficient available evidence to warrant a criminal investigation, and if so who is best placed to take action,” it said.
Prosecutors at the SFO said in May that they were “urgently reviewing,” whether to start a criminal inquiry………………………………………..Full Article: Source

FMC wants listed firms to disclose commodities hedging

Posted on 08 July 2013 by VRS  |  Email |Print

Commodity markets regulator FMC today said it will soon discuss with the Securities and Exchange Board of India (SEBI) the possibility of making it mandatory for listed companies to disclose their exposure in commodities hedging.
The companies hedge in commodities to offset risks arising out of fluctuations in raw-material prices.”We will soon write to SEBI on this issue. In fact, this was the recommendation of our Sub-committee,” Forward Markets Commission Ramesh Abhishek told PTI………………………………………..Full Article: Source

Lawmakers cite risk of banks in commodities in Bernanke letter

Posted on 04 July 2013 by VRS  |  Email |Print

Four Democratic lawmakers sent a letter to Federal Reserve Board Chairman Ben S. Bernanke asking if investments in the commodities business by Goldman Sachs Group Inc. and JPMorgan Chase & Co. (JPM) pose risks to the economy.
Representatives Alan Grayson of Florida, Raul Grijalva of Arizona, John Conyers of Michigan and Keith Ellison of Minnesota also asked Bernanke in the letter to explain the legal basis for allowing the banks to hold commodity-related assets………………………………………..Full Article: Source

New WGC gold cost guide should have investors dancing in the streets

Posted on 28 June 2013 by VRS  |  Email |Print

The World Gold Council’s (WGC) announcement of a Guidance Note on “all-in sustaining costs” and “all-in costs” metrics, should have investors dancing in the streets. Its unlikely to happen because gold miners aren’t renowned for public displays of dancing - especially with markets as depressed as they are, but it is a cause for celebration.
Admittedly it is not a binding measure, but it is a definite move toward greater clarity on the issue of gold mine cost reporting, something Mineweb has been clamouring for, for a long time………………………………………..Full Article: Source

Regulator seeks inquiry of super-fast trading

Posted on 25 June 2013 by VRS  |  Email |Print

Traders using super high-speed computers executed as many as 500 trades per second at the daily openings and closings of commodity markets during the past year, a federal regulator said Monday in a call for expanded examination of the trading tactic.
Speaking at an electronic-trading conference in Chicago, Bart Chilton, a commissioner on the Commodity Futures Trading Commission, said the high-frequency traders may be conducting so-called “wash” trades. Traders buy and sell securities almost simultaneously in a no-risk transaction that makes it appears as though there’s more market action than there really is………………………………………..Full Article: Source

India: Commodity transaction tax to be levied from July 1

Posted on 21 June 2013 by VRS  |  Email |Print

Commodity Transaction Tax (CTT) will come into effect from July 1 with a levy of 0.01 per cent of the transactional value being applicable on the seller in futures trading of a host of items such as gold, sugar and edible oils.
Apart from gold, other commodities such as silver, crude oil and base metals and processed farm items such as sugar, soya oil, mentha oil and guar gum will also come under CTT. According to a Finance Ministry notification here on Thursday, 23 pure agricultural commodities such as wheat, barley, chana (gram), cotton and potatoes would be exempted from the levy………………………………………..Full Article: Source

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