Better Markets, a non-profit financial reform advocacy group, said that the CFTC has no legal obligation to study the costs of its commodity position limits rule and that requiring it to do so could endanger financial reform efforts.
The group filed a friend-of-the-court brief on Monday defending the CFTC, which finalized a rule in October to limit the number of contracts a trader can hold in gold and other commodities. Groups have sued to stop the rules, claiming that they would harm the marketplace and that the CFTC had not weighed its economic consequences.
The brief stated that the CFTC’s main function is to protect the public and it is not obligated by law to “compare or quantify” costs and benefits, but “must be guided by the dictates of the public interest.”
The CEA requires the CFTC to “consider the costs and benefits of the action of the commission” and weigh the protection of market participants and the public, the efficiency and competitiveness of futures markets, and price discovery.