2016-12964: Position Limits for Derivatives: Certain Exemptions and Guidance

Summary

The Commodity Futures Trading Commission ("Commission" or "CFTC") is proposing revisions and additions to regulations and guidance proposed in 2013 concerning speculative position limits in response to comments received on that proposal. The Commission is proposing new alternative processes for designated contract markets ("DCMs") and swap execution facilities ("SEFs") to recognize certain positions in commodity derivative contracts as non-enumerated bona fide hedges or enumerated anticipatory bona fide hedges, as well as to exempt from federal position limits certain spread positions, in each case subject to Commission review. In this regard, the Commission proposes to amend certain of the regulations proposed in 2013 regarding exemptions from federal position limits and exchange-set position limits to take into account these new alternative processes. In connection with these changes, the Commission proposes to further amend certain relevant definitions, including to clearly define the general definition of bona fide hedging for physical commodities under the standards in CEA section 4a(c). Separately, the Commission proposes to delay for DCMs and SEFs that lack access to sufficient swap position information the requirement to establish and monitor position limits on swaps.

The agency’s own summary, as published.

What this changes

Amends 3 parts of the Code of Federal Regulations — the standing rules this notice rewrites.

• 17 CFR 37 Swap Execution Facilities
• 17 CFR 38 Designated Contract Markets
• 17 CFR 150 Limits on Positions