Q & A – Position Limits for Derivatives
What is the goal of the proposed rulemaking?
The notice of rulemaking proposes to establish limits on positions in physical commodity futures contracts as well as swaps that are economically equivalent to those contracts, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and establish position limits and related standards for registered-entity set.
The proposed position limits framework would enable the Commission to meet its statutory responsibility for setting limits in order to combat excessive speculation and manipulation while ensuring sufficient market liquidity and efficient price discovery.
Which commodities are covered by the proposed regulations?
28 specific exempt and agricultural commodities are covered by the proposed regulations.
Exempt commodities broadly include, but are not limited to, gold, silver, copper, platinum, palladium, crude oil, natural gas, heating oil, and gasoline.
Agricultural commodities broadly include, but are not limited to, corn, oats, rice, soybeans, soybean meal, soybean oil, wheat, feeder cattle, live cattle, lean hogs, milk, cocoa, coffee, orange juice, sugar, and cotton.