Regulatory Submissions

APGA Applauds CFTC’s EEMAC for Investigating Commodity Markets (Sept 27 2022) 

09-29-2022 12:42 PM

On September 27, APGA sent a letter to the Commodity Futures Trading Commission’s (CFTC) Energy and Environmental Markets Advisory Committee (EEMAC) in response to its decision to establish a subcommittee that will report out on the relationship between investment in physical infrastructure and market volatility of commodities, including natural gas futures.

The EEMAC met on September 27 to discuss, among other things, the investment in physical energy infrastructure and the effect on price volatility in the commodities market. The committee ultimately voted in favor of establishing a subcommittee that will study the issue further. APGA’s letter thanked the EEMAC for its initiative and also urged the committee to concurrently explore a related topic, which APGA recommended to the EEMAC earlier this year: examine volatility during the settlement period for the deliverable natural gas future contract and develop potential solutions, including determining the effectiveness of the physical delivery mechanism on NYMEX. Finally, due to its universal role in the value chain, APGA urged the EEMAC to prioritize natural gas futures ahead of other commodities also experiencing volatility, reasoning that understanding a commodity market underlying others may be useful in broader insight of the issue.

The EEMAC, sponsored by Commissioner Mersinger, is a statutorily mandated advisory committee, which conducts public meetings; submits reports and recommendations to the CFTC (including dissenting or minority views, if any); and otherwise serves as a vehicle for discussion and communication on matters of concern to exchanges, firms, end users, and regulators regarding energy and environmental markets and their regulation by the CFTC.

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