Sat, Aug 30, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

CME comments on CFTC’s rule making on position limits

Wednesday, October 19, 2011
Opalesque Industry Update -- CME Group, the world's leading and most diverse derivatives exchange, today released the following statement regarding the Commodity Futures Trading Commission (CFTC)'s rule making on position limits:

"CME Group commends the Commission and staff of the CFTC for their efforts to respond to the more than 13,000 comment letters filed on the CFTC's position limits proposal. We also appreciate the Commission's recognition of the need to establish equivalent position limits in the important spot month for physically-settled futures and those cash-settled futures and swaps which are based on the daily and final settlement prices of the primary physically-delivered price discovery contracts. With the lone exception of natural gas, the CFTC's interim final rule will appropriately limit opportunities for inter- market manipulation and abuse in the spot month where the risk of misconduct and artificial prices is most acute.

"The Commission's decision also rectifies for almost all physical commodities the inherent flaws in its original proposal, which would have allowed a single market participant to control in the spot month cash-settled positions equal to 125 percent of the deliverable supply in a covered commodity. We remain concerned that various provisions of the final rule relating to net portfolio and anticipatory hedging strategies will constrain legitimate risk management activities by commercial participants.

“We intend to work with the CFTC as soon as possible to ensure that deliverable supply is properly defined and calculated and that existing spot month position limits are adjusted to reflect current market conditions. This is critical given that existing limits in some products are more than 10 years old. We also remain concerned that the Commission has not yet explained its reasons for concluding that its adopted limits especially in non-spot months are necessary or appropriate and that the rules will encourage market participants to seek hedging and risk management alternatives outside of the United States."

(press release)

As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate.


BG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing Square, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the

  2. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  3. Hedge fund assets decline in July - eVestment[more]

    Bailey McCann, Opalesque New York: Total assets in hedge funds declined in July and dropped 0.49%, marking the industry's second monthly asset decline in 2014, according to the latest asset flows data from eVestment. Despite the asset decline, total industry AUM remained above the $3 trillion

  4. AIMA makes 'the case for hedge funds'[more]

    Bailey McCann, Opalesque New York: The Alternative Investment Management Association (AIMA), the global hedge fund industry body,

  5. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest