CFTC Proposes Increased Position Limits For Security Futures Products

The CFTC proposed to increase position limits on security futures products ("SFPs").

The proposal would amend CFTC Rule 41.25, which, among other things, addresses the criteria that exchanges must apply when setting position limits on SFPs. The rule mandates position limits for SFPs based upon the average trading volume and number of shares in an underlying security or securities. (Notably, position limits on SFPs have not been adjusted upwards since the rule was introduced in 2001, whereas position limits on security options - under of the jurisdiction of the SEC - have been increased in that time.)

The proposed amendments are intended to provide exchanges with more flexibility in setting limits and level the regulatory playing field for SFPs and security options. In particular, the proposed amendments would: