CFTC passes position limits on 3-2 vote

The Commodity Futures Trading Commission (CFTC) on Tuesday passed final rules related to position limits and derivatives clearing organizations (DCOs) as well as adjusting the effective date of swap regulations.

The contentious rule on position limits for 28 commodity futures and economically equivalent swap markets was passed after several changes were made from the original proposal. The rule setting limits on equivalent cash settled contracts at 5X that of physically settled contracts -- which CME Group sharply objected to -- was pulled except for natural gas contracts.

CFTC Chairman Gary Gensler indicated that there may be a couple-of-day delay in posting the rule on the Federal Register as amendments were being made up until today's meeting.

The rule on spot-month limits will become effective 60 days after the term "swap" is further defined. The Commission voted to push back the deadline on further defining swaps unitl next July. The rule on non-spot limits will become effective at the same time for the nine "legacy" agricultural contracts and after a full year of open interest data has been collected on both futures and swaps of the remaining commodities. CFTC officials estimated an end of 2012 effective date.

Click below for the official fact sheets and Q&A sheets released by the CFTC relating to each of these rules.

Fact sheet on Position Limits
Q&A sheet on Position limits

Fact sheet on DCOs
Q&A sheet on DCOs

Fact sheet on amendment adjusting swap regulation date
Q&A sheet on amendment adjusting swap regulation date

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