OREANDA-NEWS. The Republican-led US House of Representatives could vote this week to scrap a requirement for the US Commodity Futures Trading Commission (CFTC) to set position limits on crude, diesel, gasoline and natural gas contracts.

House Agriculture Committee chairman Mike Conaway (R-Texas) yesterday introduced that change through an amendment that would strike language in the 2010 Dodd-Frank financial overhaul law requiring the CFTC to set position limits on key energy, metals and agricultural contracts. Democrats had pushed for that language the bill to prevent "excessive speculation" and deter market manipulation.

Removing that language would mean the CFTC would no longer have a congressional mandate to set new position limits on commodities. The agency would still have the authority to do so, but such a move would be at the discretion of CFTC's leaders. And the agency would face an added requirement after the amendment to show new position limits were "necessary" to reduce excessive speculation.

Conaway proposed the change as an amendment to the Commodity End-User Relief Act, a bill that would reauthorize the CFTC through 2021 and create regulatory exemptions for commercial businesses. The House could vote on the bill as early as tomorrow, although it would face obstacles in the US Senate from Democrats that support position limits.

The House Rules Committee will decide today whether to allow a vote on the amendment. The committee, in a summary of the amendment" says it would clarify congressional intent that the CFTC is allowed to impose position limits so long as it shows those limits are necessary.

But consumer groups believe the amendment, if it becomes law, would almost certainly lead the CFTC to abandon its long-running attempts to set position limits. Public Citizen energy program director Tyson Slocum says the amendment would "gut" the position limits language in Dodd-Frank and almost certainly lead the CFTC to withdraw a recently softened position limits regulation it proposed last month.

Even though the next CFTC chairman could decide to proceed with efforts to adopt position limits, Slocum says that is unlikely. Republican CFTC member Christopher Giancarlo, who might become the next chairman of the agency if nominated by president-elect Donald Trump, has repeatedly questioned if position limits are necessary or appropriate.

CFTC chairman Timothy Massad, who is resigning as chairman on 20 January, in a speech before the London School of Economics today said that repealing Dodd-Frank in its entirety would be a "big mistake." Massad did not address position limits explicitly but broadly defended the agency's work and downplayed concerns that new regulations have reduced liquidity.