In a report delivered to Congress on October 24, the Commodity Futures Trading Commission recommended expansion of its oversight over trading of oil and natural gas contracts on exempt commercial markets (ECMs). The CFTC’s legislative recommendations include: (i) large trader position reporting comparable to reporting requirements that currently apply to contracts traded on regulated exchanges; (ii) position limits and/or accountability levels comparable to those that currently apply to similar contracts traded on regulated exchanges; (iii) self-regulatory oversight to detect and prevent manipulation, price distortion, and disruptions of the delivery or cash-settlement process; and (iv) emergency authority for the CFTC and the ECM to prevent price manipulation and disruptions of the delivery or cash-settlement process. The CFTC recommended that these requirements apply to ECM contracts that serve a “significant price discovery function,” a determination that would require that (x) trading volume in the ECM contract be sufficiently significant to affect regulated markets or become a pricing benchmark, and (y) the ECM contract either influence other markets or be materially referenced by others in interstate commerce on a frequent and recurring basis.

 http://www.cftc.gov/stellent/groups/public/@newsroom/documents/file/pr5403-07_ecmreport.pd