U.S. Sen. Maria Cantwell, D-Wash., said Thursday she will push the new chairman of the U.S. Commodity Futures Trading Commission to revoke a no-action letter that she says has allowed IntercontinentalExchange's (ICE) ICE Futures Europe to skirt federal regulations.

Gary Gensler, who was sworn in as the new chairman of the CFTC last week, told lawmakers this week that his staff is undertaking an extensive review of the no-action process. That process essentially allows foreign boards of trade to offer electronic trading to U.S. residents. The no-action letters, which are granted by CFTC staff, let the boards avoid registering as exchanges with the CFTC and protect them from U.S. enforcement action.

But the no-action process came under fire in 2006 after ICE Futures Europe, which already had a no-action letter dating back to 1999, began offering several futures and options contracts that were based on the settlement prices of U.S. contracts such as West Texas Intermediate crude oil.

The move was controversial because some lawmakers like Cantwell feared these "look-alike" contracts, which weren't subject to CFTC oversight, could be used to manipulate oil prices. Some dubbed it the "London loophole" because it allowed traders to skirt federal position limits.

In addition to concerns over manipulation and excessive speculation, some claimed that ICE Futures Europe shouldn't even be considered a foreign board of trade because it is a wholly owned subsidiary of an Atlanta, Ga.-based company. The no-action letter it had received dated back to 1999 before it was bought by a U.S. company.

As oil prices climbed to record highs last year, the CFTC sought to rectify the controversy and announced a special agreement with ICE Futures Europe and the Financial Services Authority, which regulates financial markets in the U.K. Under the agreement, the FSA pledged to provide the CFTC with large trader position data from the look-alike WTI contract and notify U.S. regulators when traders exceeded accountability levels.

Around the time the agreement was struck, Cantwell sent a letter to the CFTC saying that the agreement wasn't good enough in part because it still gave too much authority to U.K. regulators and didn't give CFTC direct oversight over the contract.

Cantwell, who blocked Gensler's nomination to the CFTC for months and was one of six senators to vote against him, said Thursday she asked him to immediately revoke the ICE Futures Europe no-action letter during a conversation with him Wednesday.

"I emphasized with him how important this was," she said, noting that he doesn't need to wait for congressional action to revoke a no-action letter. "This is a test in my mind to how strong he'll be as a CFTC head. If he's not going to take a tough stance on this, I'm not sure how strong he'll be on the rest of this stuff."

ICE declined to comment on Cantwell's complaints.

In January, the CFTC took steps to solidify oversight over certain foreign boards, saying that any foreign board of trade that receives a no-action letter and offers a contract based on a U.S. futures contract will be subject to the same conditions as those imposed on ICE.

But Gensler suggested in congressional testimony Thursday that the CFTC wants to go beyond administrative changes, and asked for authority from Congress to enforce position limits and reporting requirements on traders who use terminals in this country to trade U.S. look-alike contracts through foreign boards of trade.

When asked if he will consider revoking any no-action letters that have been granted over the years to foreign boards of trade, Gensler told reporters: "I've directed the staff that all options are on the table."

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com.

(Gregory Meyer contributed to this report.)