WASHINGTON, D.C.—March 18, 2010—The Futures Industry Association today filed a major comment letter in opposition to the adoption by the Commodity Futures Trading Commission of its proposed speculative position limits on energy commodities. “The FIA strongly supports the CFTC’s ongoing efforts to prevent price manipulation and to conduct effective market surveillance to protect price discovery,” said FIA President John Damgard. “Based on our analysis, the proposed rules would harm these public interests and should not be adopted.”
Click Here for a Summary of the FIA Comment Letter
Click Here for the Full Text of the FIA Comment Letter
The Commodity Futures Trading Commission is currently considering whether changes are needed in the regulatory regime that governs the application of speculative position limits to the energy futures markets. In mid-2009 the agency held several days of hearings to gather public input on potential changes to the position limit regime. On January 14, 2010, the CFTC held a public meeting to discuss a proposed rule establishing a new position limit regime for energy futures and options markets. To help FIA members and the public understand CFTC policy in this area, the FIA has listed below several information resources, including statements, testimony, position papers and current rules.
FIA Responds to the CFTC’s Proposed Position Limits Rule
Washington, D.C.—Jan. 14, 2010—The Futures Industry Association issued the following statement on behalf of FIA President John Damgard:
We commend the CFTC leadership for considering the proposed rule on position limits at a public meeting. It is helpful for the industry to hear the views of the Commissioners and staff on such an important and complex proposal.
Today’s discussion highlighted the key features of the CFTC’s proposed rules and raised questions about the potential impact on the regulated U.S. futures markets. We look forward to submitting a detailed response to the CFTC before the end of the comment period.
Several CFTC Commissioners expressed concern today about the potential harm that this proposal could cause by creating incentives for market users, including speculators, to migrate to markets outside the CFTC’s jurisdiction. We would view with great concern the adoption of any policy on position limits that would diminish the transparency of the energy markets or put U.S. exchanges at a competitive disadvantage.
Text of CFTC Proposed Rule on Position Limits (Jan. 14, 2010)
http://www.futuresindustry.org/files/Federal_Speculative_Position_Limits_for_Referenced_Energy_Contract_and_Associated_Regulations_011410.pdf
CFTC Position Limit Proposal Fact Sheet (January 14, 2010)
http://www.futuresindustry.org/downloads/CFTC_Position_Limit_Proposal_Fact_Sheet.pdf
CFTC Position Limit Proposal Q and A (January 14, 2010)
http://www.futuresindustry.org/downloads/CFTC_Position_Limit_Proposal_Q_and_A.pdf
CFTC Chairman Gary Gensler Closing Statement (Jan. 14, 2010)
http://www.cftc.gov/ucm/groups/public/@newsroom/documents/speechandtestimony/genlerstatement2_011410.pdf
CFTC Chairman Gary Gensler Opening Statement on Position Limit Proposal (Jan. 14, 2010)
http://www.futuresindustry.org/downloads/genslerstatement011410.pdf
Dunn, O'Malia and Sommers Statements
http://www.futuresindustry.org/downloads/dunnstatement011410.pdf
http://www.futuresindustry.org/downloads/omaliastatement011410.pdf
http://www.futuresindustry.org/downloads/sommersstatement011410.pdf
Statement of Steve Sherrod, CFTC Acting Director of Surveillance (Jan. 14, 2010)
http://www.futuresindustry.org/downloads/Tab_8b-Statement_of_Sherrod_Jan_14_2010.pdf
Tables and Graphs Showing Impact of CFTC Position Limit Proposal (Jan. 14, 2010)
http://www.futuresindustry.org/downloads/proposedrule011410_sherrod.pdf
CFTC Commissioner Bart Chilton Statement on Position Limit Proposal (Jan. 14, 2010)
http://www.futuresindustry.org/downloads/chitlonstatement011410.pdf
CFTC General Counsel Dan Berkovitz Statement (Jan. 14, 2010) (Background on Position Limits and the Hedge Exemption)
http://www.futuresindustry.org/downloads/Statement_of_Dan_MBerkovitz_011410.pdf
CFTC Chairman Gary Gensler Statement on Position Limits (July 29, 2009)
http://www.cftc.gov/ucm/groups/public/@newsroom/documents/speechandtestimony/genslerstatement072909.pdf
Brief Legislative History of Position Limits and the Hedge Exemption (July 28, 2009)(Testimony of CFTC General Counsel Dan Berkovitz)
http://www.cftc.gov/ucm/groups/public/@newsroom/documents/speechandtestimony/berkovitzstatement072809.pdf
FIA Testimony to CFTC on Price Discovery, Position Limits and Hedge Exemptions (Aug. 5, 2009)
http://www.futuresindustry.org/downloads/hearing080509_young.pdf
Testimony and Statements from CFTC Hearings on Speculative Position Limits in Energy FuturesDay 1. (July 28, 2009)
http://www.cftc.gov/newsroom/cftcevents/2009/oeaevent072809.html
Day 2 (July 29, 2009)
http://www.cftc.gov/newsroom/cftcevents/2009/oeaevent072909.html
Day 3 (Aug. 5, 2009)
http://www.cftc.gov/newsroom/cftcevents/2009/oeaevent080509.html
CME Advisory Notice on Position Limits (Sept. 11, 2009) http://www.cmegroup.com/rulebook/files/CME_Group_RA0909-5.pdf
CME Rules on Position Limits and Exemptions
http://www.cmegroup.com/rulebook/CME/I/5/59.html
CME Procedures for Position Limit Violations
http://www.cmegroup.com/rulebook/CME/I/4/43.html
Current Position Limits, Position Accountability Levels and Reportable Position Levels at CME Group Exchanges
http://www.cmegroup.com/market-regulation/position-limits/index.html
CME White Paper on Excessive Speculation and Position Limits in Energy Derivatives Markets (Sept. 16, 2009)
http://www.cmegroup.com/company/files/PositionLimitsWhitePaper.pdf
ICE Statement Regarding CFTC Position Limit Initiatives (July 9, 2009)
http://ir.theice.com/releasedetail.cfm?ReleaseID=395240
Current Position Limits and Position Accountability Levels at ICE Futures U.S.
https://www.theice.com/publicdocs/futures_us_reports/all/Futures_US_Position_Limits.pdf
UK Treasury and FSA Position Paper on OTC Derivatives Reform (Chapter 9 covers position limits)http://www.fsa.gov.uk/pubs/other/reform_otc_derivatives.pdf
IFM Position Limit Databank
http://www.theifm.org/index.cfm?inc=plimits/PLD.inc
“Position Limits Start to Bite”, Futures Industry, November 2009
http://www.futuresindustry.org/downloads/Nov_09-Pos_Limits.pdf
“CFTC Examines Position Limits”, Futures Industry, September 2009
http://www.futuresindustry.org/downloads/Sep_09-Pos_Limits.pdf
