• Commodity Futures Trading Commission Proposes Position Limits for Commodity Derivatives
  • February 22, 2011 | Authors: Russell L. Kamerman; David S. Mitchell; Mark Molle
  • Law Firm: Fried, Frank, Harris, Shriver & Jacobson LLP - New York Office
  • The Commodity Futures Trading Commission (the “Commission” or “CFTC”) is proposing to establish a framework for implementing position limits for certain physical commodity derivatives, including exchange-traded futures and options on futures contracts and swaps that are economically equivalent to such contracts, in accordance with Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”). The proposal also includes: (i) amendments to the bona fide hedging exemption; (ii) an exemption for positions established in good faith prior to the effective date of specific limits that could be adopted in final rules; (iii) new account aggregation standards; (iv) position visibility levels and associated reporting requirements for traders with positions exceeding specified thresholds in certain metal and energy commodities; and (v) rules imposing requirements and standards for position limits and accountability rules that are implemented by exchanges. Comments on the Notice of Proposed Rulemaking (“NPRM”) are due on or before March 28, 2011.