The Commodity Futures Trading Commission (CFTC) will host a public roundtable on June 19, 2014, to discuss questions related to a proposed rulemaking to establish speculative position limits for 28 exempt and agricultural commodity futures and option contracts and their economically equivalent physical commodity swaps (Position Limits Proposed Rule). Released by the CFTC in December 2013, the initial comment period for the Position Limits Proposed Rule closed on February 10, 2014. However, the CFTC has re-opened the comment period for the Position Limits Proposed Rule and a separate, but related, proposed rulemaking addressing aggregation requirements for purposes of complying with federal position limits. The comment period for these proposed rules closes on July 3, 2014.
Both the roundtable and the re-opening of the comment periods are expected to provide market participants with an additional opportunity to shape the CFTC’s position limits rules. The roundtable’s four panels will focus on the following topics that have been of particular concern to the market:
- Hedges of a physical commodity, gross hedging, cross-commodity hedging, and anticipatory hedging
- Process for non-enumerated exemption
- Spot-month limits and conditional exemption
- Aggregation of positions
The roundtable agenda is available at:http://www.cftc.gov/PressRoom/Events/cftcstaff_061914rtagenda. Michael Sweeney, a partner at Sutherland, will be one of the panelists.
The Division of Market Oversight staff has issued a list of specific questions to be addressed by the panelists during the roundtable, which is available at:http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/staffquestions061214.pdf. The list includes questions such as the following:
- What information collected in the normal course of business can be produced to the Commission for analysis in support of a request for an exemption by a commercial enterprise that is, in its business judgment, reducing an identified specific risk or the risk of an operating unit?
- What public policy reasons are there to recognize an exemption for anticipatory merchandising that establishes price risk exposure?