CFTC will miss statute's deadline on commodity position limits


By Charles Abbott and Tom Doggett
Wednesday, December 15, 2010

WASHINGTON -- The U.S. futures regulator acknowledged on Wednesday it will miss the January target for issuing a final rule on limiting the amount of contracts a trader can control in agricultural, energy and metals markets.

The U.S. Commodity Futures Trading Commission will also propose phasing in position limits, putting them first on the spot month and then deferred months or positions in all months combined. The CFTC will unveil the details of its plan on Thursday in its almost three-year crusade to prevent a repeat of the 2008 surge in commodity prices to record highs.

Market participants already had doubts the CFTC would meet the mid-January target for implementing position limits as required under the new financial reform law. Some Republican lawmakers, exchanges and large investors have urged the CFTC to move more slowly to prevent curtailing liquidity and increasing market volatility.

... Dispatch continues below ...


Prophecy Receives Permit To Mine at Ulaan Ovoo in Mongolia

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2) announces that on November 9, 2010, it received the final permit to commence mining operations at its Ulaan Ovoo coal project in Mongolia. Prophecy is one of few international mining companies to achieve such a milestone. The mine is production-ready, with a mine opening ceremony scheduled for November 20.

Prophecy CEO John Lee said: "I thank the government of Mongolia for the expeditious way this permit was issued. The opening of Ulaan Ovoo is a testament to the industrious and skilled workforce in Mongolia. Prophecy directly and indirectly (through Leighton Asia) employs more than 65 competent Mongolian nationals and four expatriots. The company also reaffirms its commitment to deliver coal to the local Edernet and Darkhan power plants in Mongolia."

The Ulaan Ovoo open pit mine is 10 kilometers from the Russian border and within 120km of the Nauski TransSiberian railway station, enabling transportation of coal to Russia and its eastern seaports. Thermal coal prices are trading at two-year highs at Russian seaports due to strong demand from Asian economies.

For the complete press release, please visit:

CFTC Chairman Gary Gensler told a House Agriculture subcommittee that a final rule would be issued "as soon as we can sort out" the public comments on the proposal, which would be open to comment for 60 days. The Agriculture Committee has jurisdiction over CFTC.

"We'll not finalize it by the statutory date," said Gensler.

Gensler did not suggest the level at which limits would be set. He said a formula could be used at first, with details added later.

Gensler and CFTC Commissioner Bart Chilton said spot month limits would be easier to implement than limits that cover multiple months.

"The spot month, we could do now," said Chilton, and base it on a fraction of the deliverable supply. CFTC considered a similar approach when it looked solely at energy limits.

Gensler said spot-month limits "could be phased in sooner than the all-month limits."

"The commission could consider proposing single-month and all-months-combined position limits based on the open interest for futures, options and economically equivalent swaps," he said.

Republicans on the panel said the CFTC should move more slowly. Frank Lucas, who will become Agriculture Committee chairman in January when Republicans take control of the House of Representatives, said he was "willing to consider an easing of statutory deadlines."

Jerry Moran, who will become a senator in January, said the CFTC was rushing to issue a rule before it has adequate information on market size or appropriate limits.

In an interview last week, Lucas said he expected to hold hearings next year to review CFTC rule-making for derivatives, which are being brought under federal oversight for the first time.

Chilton said he believed a delay would be the wrong approach. In prepared remarks, he said futures prices should be based on the fundamentals of supply and demand. "We saw delinked commodity prices in 2008 and some of us are concerned that we see that taking place this year," he said.

Separately, CME Group Inc. Executive Chairman Terrence Duffy took aim at the CFTC's push to control speculation in commodities trading, saying on Wednesday that position limits on investors' holdings are not a "costless palliative."

Such limits will not bring down overly high prices because they do not apply to the underlying cash markets, Duffy told the House panel.

He said the CFTC should not try to set limits before it has more information on the over-the-counter swaps markets, where vast numbers of contracts change hands away from the eyes of regulators.

"Without a thorough understanding of such data, the commission runs the risk of inappropriately setting position limits," Duffy said.

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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit: