A federal judge has struck down a rule required under the 2010 financial overhaul that seeks to limit speculative trading of commodities futures.
U.S. District Judge Robert Wilkins said Friday that the Commodity Future Trading Commission failed to show that trading caps were necessary and therefore violated federal law. He sent the rule back to the regulatory agency to be redrafted.
The rule, which was adopted on a divided vote last year, restricted the volume of futures contracts that financial investors can trade for 28 commodities. They are agricultural commodities, energy and metals that are traded on several U.S. exchanges.
The International Swaps and Derivatives Association, a group representing banks and other financial firms, and Wall Street's largest trade group, the Securities Industry and Financial Markets Association, had challenged the rule in the U.S. District Court in Washington.