On November 5, the Commodity Futures Trading Commission (CFTC) voted to propose rules that would expand the scope of the CFTC’s speculative position limit requirements for futures, options and swaps. On the same date, the CFTC also approved a separate proposal addressing the aggregation of positions across accounts with common ownership or control. Katten issued a Client Advisory on November 7 discussing the proposed aggregation requirements and is now issuing this advisory to address the proposed position limit rules. The proposed position limit rules would replace the CFTC’s Part 151 rules, which were adopted on October 18, 2011, and vacated by the US District Court for the District of Columbia on September 28, 2012.

New Position Limit Rules -

Consistent with the approach taken in the vacated Part 151 rules, the CFTC proposal identifies 28 core referenced futures contracts, and would apply aggregate position limits on a futures equivalent basis across all “referenced contracts —i.e., futures, options or swaps that are: (i) directly or indirectly linked to the price of a core referenced futures contract; or (ii) based on the price of the same underlying commodity for delivery at the same delivery location(s) as that of a core referenced futures contract. The revised rules would impose separate position limits for spot-month contracts, non-spot-month contracts and an overall limit that would be applied across all spot and non-spot contract months for all referenced contracts.