May 26, 2016

CFTC Approves Supplement to Position Limits Proposal to Permit Exchanges to Recognize Non-enumerated Bona Fide Hedges

Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today voted unanimously to issue for public comment a supplement to its December 2013 position limits proposal that will modify the procedures proposed for persons seeking exemptions from speculative position limits for non-enumerated bona fide hedging. Further the proposal would define procedures for recognition of certain anticipatory bona fide hedge positions.

The supplement would provide a new process for exchanges 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 CFTC review. The proposal also includes corresponding changes to certain regulations proposed in 2013 regarding exemptions from position limits and exchange-set position limits to take into account this new process.

In connection with these changes, the CFTC proposes to further amend certain relevant definitions, including to clearly define the general definition of “bona fide hedging position” for physical commodities under the standards in Commodity Exchange Act section 4a(c). Separately, the CFTC proposes to delay the requirement to establish and monitor position limits on swaps for DCMs and SEFs that lack access to sufficient swap position information.

All other aspects of the December 2013 Position Limits Proposal would remain the same. The supplemental notice of proposed rulemaking will be open for public comment for 30 days after publication in the Federal Register.

Comments on the supplemental notice of proposed rulemaking, which is available on the CFTC’s website, may be submitted electronically through the CFTC’s Comments Online process.

Last Updated: June 13, 2016