The UK Financial Conduct Authority (FCA) has reviewed the bespoke position limits set for a number of commodity derivatives traded on UK venues.
Following its review and as a result of strong growth in some commodity derivative contracts, the FCA has increased the limits of approximately 20 commodity derivative contracts as of February 8.
There has been one reduction in the position limit for UK Feed Wheat, which will take effect from April 8, giving market participants an adjustment period of two months.
The FCA also has marked a number of commodity derivative contracts as “TBA,” where they believe the current 2,500 limit would not be appropriate and could have the adverse effect of constraining activity and growth in those contracts. The FCA intends to review position limits that now appear to be out of date and calculating new ones as soon as possible. In the meantime, no limit is applicable to contracts marked as “TBA.”
The FCA’s webpage on position limits for commodity derivatives contracts is available here.