Energy and metals companies and funds beware: Your trading positions may be "limited"

On 30 January 2020 the Commodity Futures Trading Commission (CFTC) approved on a 3-2 vote proposed rules addressing position limits on speculative derivatives (Position Limits Proposal). The Position Limits Proposal has a 90-day comment period ending on 29 April 2020.

The Position Limits Proposal applies to 25 physically-settled futures contracts and their linked cash-settled futures, options on futures, and "economically equivalent" swaps. Nine of the 25 physically-settled futures contracts are subject to federal position limits under existing law. Of the commodities that would be newly subject to position limits, four are energy contracts and five are metals contracts, so the rule may have a significant impact on energy and metals companies and funds and other traders of such commodities.

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