CFTC Finalizes Revised Rules On Position Limits For Futures And Swaps

In a three-to-two vote on October 15, 2020, the U.S. Commodity Futures Trading Commission (the “CFTC”) finalized revised speculative position limit rules (the “ Final Rule”), wrapping up a ten-year endeavor. The Final Rule establishes new and amended spot month speculative position limits for certain physical and cash-settled commodity futures and options contracts and economically equivalent swaps. In addition, the Final Rule revises certain exemptions from speculative position limits, including for bona fide hedges, and adds new exemptions. Asset managers and other market participants should analyze the Final Rule's impact to determine whether the revised limits will affect their hedging and trading activities and whether they will be required to aggregate commodity derivative positions with accounts, investment vehicles or other entities under their ownership or control, which might include portfolio companies.