On November 5, 2013, the Commodity Futures Trading Commission (“CFTC” or “Commission”) proposed new speculative position limits. The proposal (“New Proposal”) would establish spot-month and non-spot-month limits for 28 core physical commodity contracts and their “economically equivalent” futures, options, and swaps (collectively, “referenced contracts”). The CFTC had finalized position limits in a 2011 rulemaking (“2011 Rule”), but a federal court vacated the 2011 Rule. The New Proposal constitutes the Commission’s latest effort under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) to establish federal position limits for specified physical commodity contracts beyond those already in place for certain agricultural contracts. The New Proposal would institute a position limits regime largely identical to that prescribed by the 2011 Rule, with some exceptions. The Commission approved the New Proposal for publication in the Federal Register by a 3 to 1 vote, with Commissioner Scott O’Malia casting the lone dissenting vote. The Commission also unanimously approved an accompanying proposal (“Aggregation Proposal”) that would expand the exemptions from aggregating positions that had been available under the 2011 Rule and a subsequent May 2012 proposal.

This client alert summarizes the New Proposal and the Aggregation Proposal and highlights key similarities and differences between these proposals and the 2011 Rule. The New Proposal will be open to public comment for 60 days after it is published in the Federal Register, which has not yet occurred. The Aggregation Proposal will be open to comment until January 14.