Industry Associations Comment On CFTC Position Limits Proposal

Several industry associations provided commentary on a CFTC proposal to apply federal speculative position limits to 25 "core referenced futures contracts," including futures and options linked to those contracts and economically equivalent swaps.

As previously covered, the CFTC proposed applying speculative position limits to 16 agricultural commodities, five metals, and four energy commodities. With the exception of nine of the agriculture products, the federal limits would apply only during the spot month; however, the relevant exchanges (i.e., Chicago Board of Trade, Minneapolis Grain Exchange, Intercontinental Exchange, The Commodity Exchange and New York Mercantile Exchange, depending on the product) would be required to set non-spot month limits in the other contracts. The CFTC noted that the position limits would not apply to location basis contracts, commodity index contracts, swap guarantees or certain trade options.