House to Target Position Limits Rules on Commodities Trading

House Republicans are poised to approve legislation making it harder for the Commodity Futures Trading Commission (CFTC) to complete long-delayed rules limiting speculation in commodities like oil and gold.The House is expected to vote as early as Wednesday on legislation that would make it harder for the commission to complete so-called position limits, House Republicans said.The rules would cap the size of trading positions firms could take in more than two dozen core commodity contracts, applying to a variety of energy and precious-metals commodities and are designed to curb a trader’s influence on that market.Opposed by Wall Street, the trading caps are a longtime Democratic priority that were authorized by the 2010 Dodd-Frank financial overhaul. The CFTC has yet to complete the controversial and complex restrictions after repeated tries. It voted unanimously in December to propose the caps for the third time since 2011, leaving the final version of the rule to a new commission under the incoming Trump administration.Lawmakers are expected to attach the restrictions on position limits as an amendment to legislation setting the CFTC’s regulatory powers for five years that cleared the House in the prior Congress but failed to advance through the Senate.Under an amendment advanced by House Agriculture Committee Chairman Mike Conaway, R-Texas, the CFTC would not be able to complete such limits until they first determine that any new trading caps are necessary to reduce excessive speculation.The House is also poised to vote on a measure, sponsored by Rep. Sean Duffy, R-Wis., that would require the CFTC to first obtain a subpoena before it could collect computer source code from algorithmic trading firms.The measure is a win for industry groups that have chafed under a CFTC proposal to expand its access to the computer code that drives automated trading strategies. CFTC Chairman Timothy Massad, who is preparing to step down this month, has maintained a subpoena is not necessary because source code is not different from traditional records that firms must make available to regulators.