CFTC’s Division of Market Oversight Issues Advisory Highlighting the Commission’s Special Call Authorities Relating to Claimed Exemptions from Speculative Position Limits
Washington, DC – The Division of Market Oversight (the Division) of the U.S. Commodity Futures Trading Commission (CFTC) today issued an Advisory highlighting the Commission’s special call authorities relating to claimed exemptions from speculative position limits under 17 CFR parts 150 and 151. The Division issued the Advisory at this time because: (1) there will be new traders and new commodities subject to position limits (and the related exemption reporting requirements) under the Commission’s new speculative position limit rules in Part 151; and (2) the Division believes that it is important to highlight and clarify, as a general matter, the process and recordkeeping requirements associated with claiming a hedge exemption from the Commission’s position limit rules.
The Advisory reminds those market participants claiming a bona fide hedge exemption from the speculative position limit rules that the Commission and the Division may use the special call authorities to request information related, but not limited, to the following:
- positions owned or controlled by the person claiming the exemption;
- trading done pursuant to the claimed exemption;
- any swaps, futures, options, or cash market positions which support the claim of exemption;
- relevant business relationships supporting a claim of exemption;
- their related cash, futures, and Swaps positions and transactions; and
- in certain instances, a list of pass-through swap counterparties for pass-through swap exemptions under 17 CFR § 151.5(a)(3).
The Advisory notes that these special call authorities remain an active tool for use by the Commission and the Division and directs market participants to comply in a timely manner with any such request for information.
To view the Advisory, please see the related documents link.
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CFTC’s Division of Market Oversight Issues Advisory Addressing Bona Fide Hedge Transactions and Positions
Washington, D.C. — The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) today issued an Advisory regarding the treatment of bona fide hedging transactions and positions under Commission Regulations 1.3(z), 1.47, and 1.48 as they existed prior to the adoption of the final rule addressing Position Limits for Futures and Swaps. The Division issued the Advisory at this time to remind market participants that regulations 1.3(z) and 1.48 will continue to apply to position limits under the Commission’s part 150 regulations until 60 days after the Commission and the Securities and Exchange Commission (SEC) jointly publish a rule or rules in the Federal Register further defining the term “swap.” After the term “swap” is further defined, the bona fide hedging provisions under regulation 151.5 in the final rule for Position Limits for Futures and Swaps will apply to exempt and agricultural commodities and regulation 1.3(z) will apply to excluded commodities.
The Advisory also clarifies that no new exemptions will be granted under regulation 1.47. Furthermore, as provided in regulation 151.9(d), any relief granted under regulation 1.47 for swap risk management will not apply to any new swap positions entered (including positions which extend a swap with the same counterparty) 60 days after the term “swap” is further defined.
To view the Advisory, please see the related documents link.
