CFTC Unanimously Approves Supplemental Proposal On Position Limits

On May 26, 2016, the Commodity Futures Trading Commission ("CFTC") unanimously approved a proposed supplement ("Supplemental Proposal") to its December 2013 proposal to establish position limits on futures and economically equivalent swaps.¹ The primary focus of the Supplemental Proposal is the definition of bona fide hedging positions exempt from speculative position limits. The CFTC proposes to expand the definition of bona fide hedging to recognize commercial hedging strategies as bona fide hedging. Separately, the Supplemental Proposal relieves designated contract markets ("DCM") and swap execution facilities ("SEF") of the requirement to establish speculative position limits in certain limited circumstances. The Supplemental Proposal includes a 30-day public comment period that will begin once the proposal is published in the Federal Register, which we expect to occur in early June 2016.