I am the derivatives regulation reporter for WCEA news. I have been told to travel to Punxsutawney, PA to watch for a sighting of "Excessive Speculation." If it appears, we will have 200 more pages of proposed rules in the Federal Register.
Day 1: January 26, 2010.2 At 5:00 am, my alarm starts playing "I've Got You Babe" by Sonny and Cher.3 When I leave my hotel, I step in a puddle of ice cold water up to my shin. The CFTC issues proposed "Federal Speculative Position Limits for Referenced Energy Contracts and Associated Regulations."4 I make my way to Phil's house. I face the camera and report: No Excessive Speculation to be seen.
Day 2: January 26, 2011. Exactly one year later, I head back to Punxsutawney, PA to look for Excessive Speculation. At 5:00 am, my alarm starts playing "I've Got You Babe" by Sony and Cher. When I leave my hotel, I step in a puddle of ice cold water up to my shin. The CFTC issues proposed "Position Limits for Derivatives."5 I make my way to Phil's house. Camera, lights, action: No Excessive Speculation to be seen.
Day 3: May 30, 2012. You get the picture. I awake to Sonny and Cher and step in it on my way to Phil's. The CFTC issues Aggregation, Position Limits for Futures and Swaps.6 Heart, covering Led Zeppelin, releases "Aggregation Breakdown, it's always the same . . . drives me insane." The song immediately tops the ABA Derivatives & Futures Subcommittee charts. FDLR publishes the complete song lyrics on page one. Aggregation Breakdown replaces Christmas carols at the FIA Law & Compliance Committee Executive Committee annual holiday party. I face the camera and grumpily report: No Excessive Speculation to be seen.
Day 4: November 15, 2013. I awake, I step in it. The CFTC issues proposed "Aggregation of Positions."7 Lost Jimi Hendrix tape found with new lyrics to Crosstown Traffic (Your rules are like crosstown traffic. So hard to get through to you . . . .") My report: No Excessive Speculation to be seen.
Day 5: December 12, 2013. I awake. I step in it. The CFTC issues proposed "Position Limits for Derivatives."8 Paul and Ringo re-unite and release a new version of Hello, Goodbye ("You say spec, I say hedge, You say why and I say I don't know.") My report: No Excessive Speculation to be seen.
Days 6 (May 29, 2014), 7 (December 4, 2014), 8 (January 5, 2015) and 9 (February 25, 2015):9 I awake. I smash the alarm radio! No more Sonny and Cher. On my way to Phil's, I step in it. The CFTC repeatedly reopens the comment period for "Position Limits for Derivatives and Aggregation of Positions." The Animals announce their 2015 World-Wide "We Gotta Get Out of This Place" Tour. The Ticket Master web site, operated by the CFTC, crashes. When it finally recovers, derivatives lawyers, compliance personnel, traders, ex-CFTC staffers, and their friends and relatives purchase every available ticket in five minutes. I face the camera and report: No Excessive Speculation to be seen.
Day 10. April 1, 2015 (No kidding!). I awake. On my way to Phil's, I step in it. The CFTC sues Kraft Foods for excessive hedging! I face the camera and report: No Excessive Speculation to be seen.
Day 11. Today. I am determined to escape Punxsutawney, PA. I awake with the woman of my dreams still in my arms. I am nice to the salesman. I sidestep the pothole full of icy water. I catch the kid falling from the tree. I save the homeless man. I finally convince the Precedents to play an entire set of AC/DC, Aerosmith and Guns N' Roses. I head over to Phil's. I can feel that today is the day. The CFTC re-issues proposed "Position Limits for Derivatives." The sound system in the town square starts blasting "Bringin' on the Heartache" by Def Leppard The entire town sings the chorus . . . .
Footnotes
1 We recommend re-watching the movie and listening to the cited tunes before reading this article.
2 Thank goodness Ken Rosenzweig is retiring. He would not be able to resist pointing out that this is pre-DFA.
3 Why couldn't it have been "A Day in the Life" by Lennon and McCartney?
4 See Federal Speculative Position Limits for Referenced Energy Contracts and Associated Regulations, 75 Fed. Reg. 4143 (Jan. 26, 2010).
5 See Position Limits for Derivatives, 76 Fed. Reg. 4752 (Jan. 26, 2011).
6 See Aggregation, Position Limits for Futures and Swaps, 77 Fed. Reg. 31767 (May 30, 2012).
7 See Aggregation of Positions 78 Fed. Reg. 68946 (Nov. 15, 2013).
8 See Position Limits for Derivatives, 78 Fed. Reg. 75680 (Dec. 12, 2013).
9 See Position Limits for Derivatives and Aggregation of Positions, 79 Fed. Reg. 30762 (May 26, 2015); Position Limits for Derivatives and Aggregation of Positions, 79 Fed. Reg. 71973 (Dec. 4, 2014); Position Limits for Derivatives and Aggregation of Positions, 80 Fed. Reg. 200 (Jan. 8, 2015); Position Limits for Derivatives and Aggregation of Positions, 80 Fed. Reg. 10022 (Feb. 25, 2015).
Previously published in Futures and Derivatives Law Report, Volume 35, Issue 6
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