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By Douwe Miedema
WASHINGTON, May 20 (Reuters) - Large energy companies lookset to slip through the maze of new rules for derivativestrading, a group of U.S. senators said, urging regulators totighten oversight to cover all the market.
As of this year, the U.S. Commodity Futures TradingCommission (CFTC) subjects companies trading more than $8billion in swaps to tough oversight unless they do so to hedgeprice swings in their day-to-day business.
But oil companies such as BP Plc and Royal DutchShell Plc have not yet joined the 70 or so investmentbanks that have registered with regulators, despite being active in the market.
"We are concerned that CFTC is failing to bring energy swapdealers under its oversight," a group of six senators led byDianne Feinstein, a California Democrat, said in a letter toCFTC Chairman Gary Gensler.
"This limits CFTC's ability to monitor for manipulation,excessive speculation, and systemic risk in energy markets,"said the letter, which was dated May 20.
A Reuters story on the issue said in March that BP wouldregister with the CFTC, although not for several more months,while Royal Dutch Shell was the other oil major consideringregistration.
The CFTC's $8 billion threshold was too high for the energycompanies, the senators said in their letter, given the marketfor energy swaps is far smaller than the one for interest rateswaps, which is dominated by the banks.
The letter urged the CFTC to lower the threshold for energyswaps should the regulator find that large parts of the energyswaps market escaped its oversight.
The CFTC did not have an immediate comment. BP and Shell didnot immediately react to a request for comment. Shell has saidin the past that it would register when it met the CFTC's $8billion threshold.
Dealer registration is one of the many ways the Dodd-Frankoverhaul of Wall Street seeks to make derivatives trading safer- and less opaque - after it was blamed for playing a role in the 2007-09 credit meltdown.
Most of this effort is aimed at banks such as Citigroup Inc, Bank of America Corp and JPMorgan Chase & Co, who dominate the worldwide $630 trillion swaps market.
Energy companies stepped into the market during the 2000scommodity boom, sometimes competing with Wall Street head tohead, and have lobbied hard so as not to be lumped together withthe investment banks in the regulatory crackdown.
