On August 13, the Federal Trade Commission (FTC) issued a Notice of Proposed Rulemaking to seek public comment on its proposed rule prohibiting market manipulation in the petroleum markets. The new FTC Notice follows an Advance Notice of Proposed Rulemaking issued in May. The proposed rule, which is intended to implement Section 811 of the Energy Independence and Security Act of 2007, employs a liability scheme modeled after Securities and Exchange Commission Rule 10b-5 and would prohibit manipulative practices in connection with the purchase of crude oil, gasoline or petroleum distillates at wholesale.
In its Notice, the FTC rejected arguments raised by several futures industry commenters that the proposed rule should be amended to limit or eliminate its application to futures trading activities already regulated by the Commodity Futures Trading Commission. The FTC asserted that CFTC jurisdiction over futures market manipulation is not exclusive and that the adoption of rules “to give full effect to all statutory schemes that may address the conduct at issue” is appropriate, notwithstanding the possibility of regulatory overlap with the CFTC.
The comment period for the proposed rule closes on September 18.