Introduction -

The U.S. Commodity Futures Trading Commission (“CFTC”) has proposed a comprehensive set of regulations imposing speculative position limits on exchange-traded futures and options contracts and economically equivalent derivatives that reference 28 agricultural, metal, and energy commodities (“Proposed Position Limit Rules”). On the same day, the CFTC proposed amendments to its existing requirements for aggregating positions controlled by a single participant for the purpose of applying the proposed position limits (“Proposed Aggregation Amendments”).

This Dechert OnPoint discusses: (i) the recent history of the CFTC's position limits regime, (ii) the new “Referenced Contracts” to which the position limits would apply and the proposed methodology for determining the position limits, and (iii) the requirements for aggregating positions and the proposed expanded circumstances under which aggregation is not required.