* Rules case must first go to lower court
* Trade groups: CFTC exceeded authority
WASHINGTON, Jan 21 (Reuters) - A U.S. appeals court
has dismissed a lawsuit by the financial industry challenging
new federal regulations aimed at cracking down on speculation in
commodities markets, a move that will likely delay a decision
over whether the rules pass muster.
The Securities Industry and Financial Markets Association
and the International Swaps and Derivatives Association in
December filed challenges to the regulations adopted last year
by the Commodity Futures Trading Commission.
The U.S. Court of Appeals for the District of Columbia
Circuit dismissed the lawsuit saying that the case must first be
heard by a lower court, an argument advanced by the CFTC.
"There is no express congressional authorization of direct
appellate review applicable to the petition for review in this
case," the three-judge panel said in a brief order issued late
They said that federal laws provided for appellate review
for other agency action but not the challenged regulation.
The CFTC voted 3-2 in October to set "position limits" on
the number of commodity futures and swaps contracts that a
trader could hold. It has been decried by traders as a
politically motivated effort to cap prices that will make
markets less liquid and more volatile.
The two trade groups sued to block the new rules arguing
that the CFTC exceeded its authority and that the regulations
were not adequately justified.
The CFTC had argued that the case should first be heard by
the U.S. District Court for the District of Columbia. Once that
court hears the case, whatever decision reached there can be
challenged at the appeals court, a lengthier process.
The industry groups already have filed a challenge at the
district court, but it was put on hold pending a decision by the
appeals court on whether it would hear the case.
Representatives for the industry and the CFTC were not
immediately available for comment.
(Reporting By Jeremy Pelofsky; Editing by Vicki Allen)
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