May 7, 2010

CFTC’s Division of Market Oversight Issues Advisory Regarding Intraday Speculative Position Limits

Washington, DC – The U.S. Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight (“DMO”) today issued an Advisory to alert market participants with respect to their ongoing legal obligations to comply with speculative position limits. Speculative position limits apply to positions held on designated contract markets (“DCMs”) and on exempt commercial markets (“ECMs”) with significant price discovery contracts (“SPDCs”) (collectively, “exchanges”).

Speculative position limits provide for the maximum size of the net long or short position that any one person may hold or control in futures at any point in time. In enforcing speculative position limits, the Commission and exchanges rely on information generated by the Commission’s Large Trader Reporting System (“LTRS”) or on equivalent large trader reporting systems maintained by individual exchanges. Under the LTRS, daily reports are filed at the end of the trading day (“as of the close of the market”).

In this Advisory, DMO reaffirms that, irrespective of the end-of-day applicability of the LTRS, speculative position limits apply on an intraday basis as well as an end-of-day basis. This applies to both Federal limits for certain agricultural commodities, set out in Commission regulation 150.2, and any exchange limits imposed in accordance with the core principles for DCMs or ECMs with SPDCs. A trader whose position exceeds the applicable speculative position limit at any time during the day is in violation of the Commodity Exchange Act and CFTC regulations, even if the position is subsequently reduced to a level within the applicable limit by the close of the market for that day. Accordingly, intraday speculative position limit violations have been and continue to be subject to Commission enforcement action as violations of the Act.

Media Contacts
Scott Schneider
202-418-5174

R. David Gary
202-418-5085

Last Updated: May 7, 2010