Ratings agency and financial research firm Standard & Poor's (S&P) plans to roll out two commodity-related sub-indexes that focus only on Asian and European contracts in response to fears the US Commodity Futures Trading Commission (CFTC) will make further changes to existing regulations this year.

Michael McGlone, senior director of commodities at S&P, estimates investment in commodity indexes could reach $60 billion this year, but fears over restrictive US regulation could put people off investing in US contracts.

"Over the past year we have seen a large migration to commodity index investment, and in 2010 inflows could reach an estimated $60 billion," said McGlone. "However, the fear CFTC regulation changes could be more restrictive has made people more cautious about entering the commodities market, and certainly the energy markets. While some of these fears have been alleviated, the indexes allow investors to gather total return without the risk of changing their benchmark investments because it does not reference any contracts that are liable to be affected by potential changes."

The two new sub-indexes are created from the S&P World Commodity Index (S&P WCI), and reference the world's most liquid commodities, excluding US contracts. The two sub-index launches will be subject to the success of the S&P WCI and appetite from clients who would like to pinpoint regional commodity contracts that are not exposed to US regulations.

One index will reference the most liquid commodity contracts in Asia, while the other will target only Europe. By avoiding inclusion of US commodities contracts, it is not likely to be affected by existing or possible changes to US commodity trading regulations.

The Asia sub-index will probably reference contracts from the Tokyo Commodity Exchange and the Bursa Malaysia. The European sub-index of the S&P WCI will include the most liquid option contracts, such as ICE Brent Crude oil futures worth 50% of the index.

However, McGlone says many base metals contracts will not be included because they did not pass the liquidity screening process.