CFTC Proposes Modifications to Position Limit Aggregation Rules for Futures and Swaps

Overview

On May 30, 2012, the Commodity Futures Trading Commission (the "CFTC") published a notice of proposed rulemaking (the "Proposed Rules") modifying the position aggregation provisions in final rules released October 26, 2011 (the "Existing Rules"). The Existing Rules established CFTC-administered speculative position limits for 28 physical delivery commodity futures and options contracts, as well as for swaps that are economically equivalent to such contracts, and largely retained the existing aggregation standards with some modifications. See our Alert on the Existing Rules. The Proposed Rules would (i) permit any market participant with an ownership interest of from 10% up to 50% in an entity to file for an exemption from aggregation by demonstrating independence in decision making, (ii) modify the definition of independent account controller, (iii) modify the exemption from aggregation based on federal law restrictions and extend the exemption to foreign