On May 7, the Division of Market Oversight (DMO) of the Commodity Futures Trading Commission issued an Advisory regarding speculative position limits, which apply to contracts listed on designated contract markets (DCMs) and to designated "significant price discovery contracts" listed on exempt commercial markets (ECMs). In its Advisory, DMO states that market participants must assess their compliance with speculative position limits, whether set by the CFTC (in the case of enumerated agricultural contracts) or by DCMs and ECMs (in the case of other contracts), on an ongoing basis during the trading day, and not merely at the end of the trading day. Accordingly, market participants whose positions exceed speculative position limits at any point during the trading day may be subject to CFTC enforcement action, even if they reduce their position prior to the end of the trading day (when daily large trader reports are filed).

The DMO Advisory is available here.