FED EXTENDS COMMENT PERIOD FOR NEW COMMODITY RULES

FED EXTENDS COMMENT PERIOD FOR NEW COMMODITY RULES

WASHINGTON, Feb 27 (Reuters) – The U.S. Federal Reserve gave market parties 30 more days to comment on its plan to submit Wall Street banks to greater restrictions in dealing physical commodities, the central bank said on Thursday.

The Fed last month took a first formal step to rein in banks’ ownership of oil tankers, metals warehouses and other such assets, worried that a major catastrophe could jeopardize one of the banks it oversees.

“The Board extended the comment period to allow interested persons more time to analyze the issues and prepare their comments,” the Fed said in a short release.

Banks including JP Morgan Chase  JPM.N and Morgan Stanley  MS.N are already reducing the business, a once-lucrative trading niche that has reaped billions of dollars of revenue over the years, but is now facing tougher rules.

In what is known as an advanced notice of proposed rulemaking, the Fed in January launched an optional initial step in the sometimes years-long process of making new regulations, seeking public comment.