U.S. Farm State Lawmakers Urge CFTC to Examine Volatile RINs Market
by Cezary Podkul (Reuters) Thirteen U.S. lawmakers on Tuesday urged the derivatives market regulator to examine fraud and manipulation in the cash market for ethanol blending credits known as RINs, as political scrutiny of the market intensifies following an unprecedented 2,900 percent spike in prices earlier this year.
The group sent a letter to Commodity Futures Trading Commission Chairman Gary Gensler asking that his agency “use its expertise and authority in overseeing markets for commodities futures to look into what extent fraud and manipulation have played (a role) in the volatility of RIN prices.”
However, the letter, sent by representatives of ethanol-producing states of Minnesota, Iowa, Illinois, Wisconsin and South Dakota, appeared to stop short of calling for a full-blown investigation into the market for the credits, which surged from 5 cents to almost $1.45 per credit in the first seven months of the year.
…RINs are mostly traded on a cash over-the-counter basis via instant messages, email or over the phone – a realm outside the CFTC’s purview.