CFTC and Oil Trading

The CFTC (USA) and the FSA (UK) get together to look at more supervision of the global oil markets. The CFTC, the FSA and the oil trading market The CFTC is an independent agency with the mandate to regulate commodity futures and option markets in the US, including the oil markets. The CFTC stands for the Commodity Futures Trading Commission.

News release - 20th August 2009

CFTC and FSA to enhance regulatory cross border surveillance of oil markets

US CFTC Chairman Gary Gensler and UK FSA Chairman Lord Turner today announced that they have agreed on steps to strengthen cross border supervision of energy futures markets. This action builds upon the existing cooperative efforts by the two agencies to address cross border oversight of US and UK energy markets and will enhance the on-going information sharing agreed to in the 2006 CFTC – FSA arrangement on linked contracts.

The respective organizations will immediately work toward implementing strengthened surveillance over linked energy contracts including, where appropriate:

• enhanced direct access rights to trade execution and audit trail data;

• mutual on-site visits of exchange operators;

• the sharing of exchange regulations and notices;

• the sharing of disciplinary notices; and

• the framework to consider the coordination of taking emergency action.

“I believe that we must effectively utilise all existing powers to ensure that futures markets remain free of manipulation, fraud, or other market abuses.” Chairman Gensler said. “Achieving this goal requires a coordinated international response. The CFTC will work closely with the United Kingdom’s Financial Services Authority to respond to these challenges in a coordinated manner.”

“It is important that we continue to pursue all means to maintain fair, orderly and efficient markets both nationally and internationally.” FSA Chairman Lord Turner said. “The measures announced today will facilitate coordinated action, where appropriate. I am pleased that we continue to work collaboratively with the CFTC to achieve our common goals.”

In November 2006, the CFTC and FSA signed a Memorandum of Understanding to share information necessary for the respective authorities to detect potential abusive or manipulative trading practices that involve trading in related contracts on U.K. and U.S. derivatives exchanges. The CFTC and FSA will continue to work together on oversight of related contracts traded in both of their markets and other matters of mutual concern.

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