CFTC Proposes New Position Limits For Physical Commodity Derivatives

In a party-line 3-2 vote, the CFTC proposed (see here) applying federal speculative position limits to 25 "core referenced futures contracts," including futures and options linked to those contracts and economically equivalent swaps. The 25 core contracts include 16 related to agriculture, five related to metals, and four related to energy. With the exception of nine of the agriculture products, the federal limits would apply only during the stop month; however, the relevant exchanges (i.e. CBOT, MGEX, ICE, COMEX and NYMEX, depending on the product) would be required to set non-spot month limits in the other contracts.

The position limits would not apply to location basis contracts, commodity index contracts, swap guarantees and certain trade options.