US regulators have imposed new trading conditions on some Dubai Mercantile Exchange contracts in a bid to limit excess speculation in futures markets.
The Commodity Futures Trading Commission (CFTC) said on Monday it was amending a letter that gave the exchange permission to offer electronic trading in the US.
It comes as the Dubai exchange which is a joint venture with the New York Mercantile Exchange (NYMEX), considers whether to start trading a contract for West Texas Intermediate Oil.
The commission is taking the action as the US Congress raises questions about the role of oil speculation, Bloomberg reported.
Under the new rules, which will apply to any US-linked contracts in the future, Dubai must introduce position limits that match those in the US as well as provide daily reports detailing large trades.
The Dubai Mercantile Exhange said in a statement on Tuesday it supported the recent movements by the CFTC, and US Congress to address international transparency in the international electronic energy and commodity markets.
“The DME does not list a WTI financial futures contract, although we received a no-action letter from the CFTC to allow us to list such a contract, and NYMEX has received an amendment to its clearing order enabling it to clear such positions,” the exhange said.
In early June, the DME stated that if it were to launch a WTI contract, DME would implement comparable position limits to those that NYMEX currently has in place on its Light Sweet (WTI) Crude Oil Futures contract.
As part of the NYMEX Clearing Order, large trader reporting to the CFTC and NYMEX would be required, the DME said.
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