The CFTC’s pending re-proposed speculative position limits and position aggregation rulemakings (the “Re-Proposal”), like its previous rules that were vacated by a federal district court, represent a radical departure from the CFTC’s past position limits precedents in several respects. In some instances, the Re-Proposal acknowledges this change in course and attributes it to the mandates of the Dodd-Frank Act. In other instances, it is relatively silent in this regard. And in still others, the Re-Proposal suggests that it is adhering to CFTC precedent, although close scrutiny reveals that not to be the case.
In an article recently published in the Futures & Derivatives Law Report, Terry Arbit, a partner in the Washington, DC, office of Norton Rose Fulbright, focuses on the latter category. The article considers two issues on which the CFTC’s precedents do not support the claim of historical consistency asserted in the Re-Proposal. Specifically, in its approach to non-spot month position limits and position aggregation, the Re-Proposal is neither consistent with, nor supported by, CFTC precedent. It is, instead, a break with the CFTC’s past.
The article also provides a general overview of the Re-Proposal, as well as significant comments offered during a CFTC staff Roundtable on the Re-Proposal that was convened in June 2014.