Commodities Crackdown Could Curb ETFs (UNG, USO)

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July 29, 2009 11:24am NYSE:UNG NYSE:USO

regulationDon Dion wrote an interesting article today on thestreet.com highlighting the Commodities Futures Trading Commission (CFTC)’s review of the ETF hedging exemption. Dan states, “Strict position limits on commodities trading could curb the development of


ETFs like U.S. Oil (USO) and U.S. Natural Gas (UNG). ETFs currently use an exemption to give investors access to complex futures markets, but regulators are beginning to question whether investors should be there in the first place.”

Further into the article Don states, “The managers of UNG and USO have been quick to contradict claims that their funds have undue influence on the commodities market. Comments from CFTC General Counsel Dan Berkovitz indicate that the CFTC does not have to wait around for proof before acting. During the first hearing on commodity position limits, Berkovitz noted, “you don’t have to wait for some damage to the market or some undue burden on commerce.”

For the full story click: HERE

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