The Washington Post provides the following details:
The move aims to reduce the volatility of prices but faces resistance from top Wall Street firms, which fear the efforts could cut into profits. Regulators and lawmakers increasingly worry that these firms have used their size and power to inflate the prices of commodities, booking profits in the process.With any new heavy-handed regulation, the laws of unintended consequences will quickly come into play as there is a very real (and very understandable) interest by a growing number of investors to exchange their paper money for something more tangible.
Concern over such deal-making reached a fever pitch last summer, when oil prices were sky high and people were feeling pain at the gas pump. CFTC data showed last year that a significant amount of trading in oil was concentrated in the hands of just a few speculators. These worries have waned since then, as gas prices have moderated from last year's highs, though a recent run-up in fuel prices may prompt new questions.
While a futures contract via a commodity index fund or ETF is just a paper claim on some commodity, it is, nonetheless, a claim on something that is not so easily produced as the many other "paper" investments available today.