Strict position limits on commodities trading could curb the development of ETFs like U.S. Oil ( USO) and U.S. Natural Gas ( UNG). ETFs currently use an exemption to give investors access to complex futures markets, but regulators are beginning to question whether investors should be there in the first place.In the first of a series of hearings on commodities position limits, Commodities Futures Trading Commission (CFTC) Chairman Gary Gensler spoke to ETF investors when he asserted that speculation by index investors contributed to soaring commodities prices last year. ETFs rely on a "bona-fide hedging exemption" to structure products that offer investors a way to participate in commodities prices. Over the last decade ETF products have opened up markets to retail and institutional investors alike, prompting a massive influx of funds to previously inaccessible areas such as commodity futures. Currently the CFTC sets hard position limits on some agricultural commodities while letting exchanges dictate limits on all other products. This distinction has not been lost on ETF issuers who would like to use their exemption to offer investors access to the entire commodities market. In a June letter to the CFTC, the managers of UNG and USO asked officials to extend the bona-fide hedging exemption to all commodities. The CFTC and SEC, however, have other ideas. The CFTC hearings suggest that regulators could expand regulatory reach in the commodities markets to crack down on speculation. Even if the price of certain commodities is set by exchanges, the CFTC could curb positions.