position limits

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On June 3, the European Securities and Markets Authority (ESMA) published updated versions of its opinions on transparency (Transparency Opinion) and position limits (Position Limits Opinion) for third-country trading venues (TCTVs) under MiFID II and MiFIR.
Continue Reading ESMA Updates Opinions on Transparency and Position Limits for Third-Country Trading Venues

The Commodity Futures Trading Commission Divisions of Market Oversight (DMO), Swap Dealer and Intermediary Oversight (DSIO), and Clearing and Risk (DCR) (together, the Divisions) issued CFTC Letter 20-17 to remind Designated Contract Markets (DCMs), Futures Commission Merchants (FCMs) and Derivatives Clearing Organizations (DCOs) of their obligations to prepare for extreme market volatility, low liquidity and possibly negative pricing for certain contracts. The Divisions issued the advisory in light of unusually high volatility and negative pricing experienced in the May 2020 West Texas Intermediate (WTI), Light Sweet Crude Oil Futures contract on April 20 (the penultimate day of trading and expiration of the contract), although the guidance also applies to trading in other commodities.
Continue Reading CFTC Staff Issues Advisory Addressing Current Market Conditions

The Commodity Futures Trading Commission’s (CFTC) Energy and Environmental Markets Advisory Committee (EEMAC) announced that it will hold a public meeting at 9:30 a.m. on March 24 at the CFTC’s headquarters in Washington, DC. At the meeting, the EEMAC will consider the CFTC’s proposed rule regarding the establishment of position limits for derivatives contracts that provide for physical delivery.
Continue Reading CFTC’s Energy and Environmental Markets Advisory Committee to Meet on March 24

On January 30, the Commodity Futures Trading Commission (CFTC) voted to publish for comment revised rules establishing position limits on derivatives contracts that provide for physical delivery. The vote was 3-2, with Commissioners Behnam and Berkovitz dissenting.
Continue Reading CFTC Proposes Revised Rules Establishing Position Limits on Derivatives Contracts That Provide for Physical Delivery

On September 16, the Commodity Futures Trading Commission (CFTC) unanimously approved 1) a final rule on security futures product (SFP) position limits and position accountability for (Final Rule); and 2) a proposed rule on public rulemaking procedures (Proposed Rule).
Continue Reading CFTC Unanimously Approves Measures Related to Position Limits and Position Accounting for Security Futures Products and Public Rulemaking Procedures

On January 23, the European Securities and Markets Authority (ESMA) published an opinion, dated January 18, on position limits on ICE Low Sulphur Gasoil futures and options commodity contracts.
Continue Reading ESMA Publishes Opinion on Position Limits on ICE Low Sulphur Gasoil Futures and Options Commodity Contracts

On October 22, the UK Financial Conduct Authority (FCA) updated its webpage for bespoke position limits set for a number of commodity derivatives traded on UK trading venues, namely contracts traded on ICE Futures in the United Kingdom.

Following ICE Futures’ recent update of its range of products, the FCA has made the following amendments to its webpage:
Continue Reading FCA Updates Webpage on MiFID II Position Limits for Commodity Derivative Contracts

The Commodity Futures Trading Commission is proposing to amend its position limits rules for security futures products (SFPs) to provide exchanges that list SFPs with greater discretion in setting limit levels, allowing the exchanges to provide a more effective risk management tool.

Specifically, the proposed CFTC amendment would: (1) increase the default level of equity SFP position limits to 25,000 (100-share) contracts, from 13,500 (100-share) contracts; and (2) modify the criteria for setting a higher level of position limits and position accountability levels.
Continue Reading CFTC Proposes Amendments to Its Position Limit Rules

On May 15, the European Securities and Markets Authority (ESMA) published an opinion on position limits proposed by the UK Financial Conduct Authority (FCA) in respect of ICE Low Sulphur Gasoil 1st Line Future and Option contracts. ESMA found that the contracts are consistent with the objectives established in the revised Markets in Financial Instruments Directive (MiFID II) and with the methodology developed for setting those limits. The opinion also concerns certain balance of the month, or “Balmo” contracts, which share contract specifications with the monthly contract and are priced according to the same underlying objectives.
Continue Reading ESMA Publishes Opinion on Position Limits on ICE Low Sulphur Gasoil 1st Line Contracts