ISDA, the Futures and Options Association (FOA) and the European Federation of Energy Traders (EFET) have submitted their view on position limits to the Council of the EU working group currently discussing the MiFID reform. They maintain that:

  • position limits should only apply to delivery (spot) month and physically settled contracts, as these are the contracts that can give rise to market disruption or manipulation;
  • netting of OTC derivatives and futures should be allowed; and
  • hedging of commercial risk or treasury financing activity should be exempted.

(Source: Note on Position Limits)