DSG: CFTC Approves Supplement to Position Limits Proposal

TUESDAY, 2016 MAY 31 – DELTA STRATEGY GROUP:

Friday, the U.S. Commodity Futures Trading Commission (CFTC or Commission) voted unanimously to issue for public comment a supplement to its December 2013 position limits proposal that will:

  • Provide a new process for exchanges to recognize certain positions in commodity derivative contracts as non-enumerated bona fide hedges or enumerated anticipatory bona fide hedges;
  • Exempt from federal position limits certain spread positions;
  • Further amend certain relevant definitions, including the general definition of “bona fide hedging position” for physical commodities; and
  • Delay the requirement to establish and monitor position limits on swaps for designated contract markets (DCMs) and swap execution facilities (SEFs) that lack access to sufficient swap position information.

All other aspects of the 2013 position limits proposal will remain the same.  Chairman Massad said “this proposal is a critical piece of [the CFTC’s] effort to complete the position limits rule this year” and that the “[Commission] is working to review exchange estimates of deliverable supply so that spot month limits may be set used on current data.”  Commissioner Giancarlo said “the supplemental proposal leverages exchange expertise and resources to enable exemptions to be granted in an efficient and timely manner without sacrificing market integrity,” and that “the Commission would remain the ultimate arbiter of exemptions from position lists by retaining the authority to review and reverse any exchange-granted exemption.”

 

Delta Strategy Group (DSG) will be providing a summary of the supplement in the near future, but please see attached three documents for your recollection:

The Commission will solicit comments on the supplemental proposal for 30 days after publication in the Federal Register.

 

Please let us know if you have any questions.

 

 

More Advocacy Issues

The PDF below provides an outline of the next COVID-19 relief package agreed upon by The White House and Senate Republicans. Senate Republicans plan to release the plan today to allow for the Senate and House to begin discussion. Click here for outline.

Read More
 

On July 18th, the Bangladesh Textile Mills Association (BTMA) wrote the International Cotton Association (ICA) in regarding to their inability to fulfill contracts due to the current environment. On July 22nd, ICA replied to BTMA by stating “the legal concept of force majeure is intended to cover those circumstances that could delay or impede the […]

Read More
 

CFTC’s Open Meeting

July 23rd, 2020

On July 22nd, U.S. Commodity Futures Trading Commission held an open meeting to consider two items: (1) Final Rule: Capital Requirements for Swap Dealers and Major Swap Participants; (2) Proposed Rule: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swaps Participants. See PDF below for key takeaways and details provided by Delta Strategy […]

Read More
 

On July 21st, U.S. Commodity Futures Trading Commission’s Market Risk Advisory Committee had a meeting. See PDF below for key takeaways and details provided by Delta Strategy Group. Click here.

Read More