ARTICLE
16 June 2016

US Commodity Futures Trading Commission Issues Supplement Modifying Position Limits Proposal

AO
A&O Shearman

Contributor

A&O Shearman was formed in 2024 via the merger of two historic firms, Allen & Overy and Shearman & Sterling. With nearly 4,000 lawyers globally, we are equally fluent in English law, U.S. law and the laws of the world’s most dynamic markets. This combination creates a new kind of law firm, one built to achieve unparalleled outcomes for our clients on their most complex, multijurisdictional matters – everywhere in the world. A firm that advises at the forefront of the forces changing the current of global business and that is unrivalled in its global strength. Our clients benefit from the collective experience of teams who work with many of the world’s most influential companies and institutions, and have a history of precedent-setting innovations. Together our lawyers advise more than a third of NYSE-listed businesses, a fifth of the NASDAQ and a notable proportion of the London Stock Exchange, the Euronext, Euronext Paris and the Tokyo and Hong Kong Stock Exchanges.
On May 26, 2016, the CFTC issued for public comment a supplement to the CFTC's December 2013 position limits proposal.
United States Finance and Banking

On May 26, 2016, the CFTC issued for public comment a supplement to the CFTC's December 2013 position limits proposal. The supplement would permit exchanges to recognize, subject to CFTC review, certain positions in commodity derivative contracts as non-enumerated bona fide hedges or enumerated anticipatory bona fide hedges, as well as to exempt from federal position limits certain spread positions.

In a statement issued concurrently with the proposed rule, CFTC Chairman Timothy Massad noted that the proposed supplemental rule was a critical piece of the CFTC's effort to finalize rules on position limits in 2016.

CFTC Commissioner Christopher Giancarlo also voiced support for the proposal in a separate statement, stating his belief that the proposal reflects practical realities by recognizing that most exchanges do not have access to sufficient swap position information to effectively monitor swap position limits.

If adopted, the proposed supplement would relieve designated contract markets and swap execution facilities from setting and monitoring exchange limits on swaps until DCMs and SEFs have access to data that would enable them to do so.

The full text of the proposed supplemental rule is available at: http://www.cftc.gov/idc/groups/public/@newsroom/documents/file/federalregister052616.pdf.

The text of Chairman Massad's statement is available at: http://www.cftc.gov/PressRoom/SpeechesTestimony/massadstatement052616.

The text of Commissioner Giancarlo's statement is available at: http://www.cftc.gov/PressRoom/SpeechesTestimony/giancarlostatement052616.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More