CFTC Re-Proposes Position Limits Rule and Proposes Revised Aggregation Requirements

The US Commodity Futures Trading Commission (CFTC), on November 5, 2013, re- proposed a rulemaking (the Re-­Proposed Rule) that would establish specific limits on speculative positions in 28 physical commodity futures and option contracts (Core Referenced Futures Contracts) as well as swaps that are economically equivalent to such contracts in the agriculture, energy and metals markets. On the same date, the CFTC proposed another rule addressing the circumstances under which market participants would be required to aggregate their positions with other persons under common ownership or control (the Proposed Aggregation Requirements).

The CFTC issued the Re-­Proposed Rule in response to a US District court order vacating the CFTC’s previous rule on position limits (the Original Position Limits Rule)3 and directing the CFTC to resolve certain ambiguities concerning its statutory authority to implement position limits under the Dodd-­Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-­Frank Act). While the preamble of the Re-­Proposed Rule attempts to reconcile the ambiguities identified in the court’s order, the substance of the Re-­Proposed Rule is largely similar to the Original Position Limits Rule. Specifically, as with the Original Position Limits Rule, the Re-­Proposed Rule would, among other things....

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