Position Limits Regulation - Illustrative Tables - Setting Non-spot-Month Position Limits

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Dodd-Frank Timeline, Position Limits for Derivatives
Interim and Final Rule VACATED BY COURT ORDER Re-proposed Rule Issue Comment Deadline (reopen February 26, 2015)
November 18, 2011 September 28, 2012 November 5, 2013 March 28, 2015

On December 16, 2010, the CFTC held an open meeting, the Eighth Series of Proposed Rules under the Dodd-Frank Act. Among the topics at this meeting was a rule proposal regarding the setting of position limits for derivatives participants. After considerable discussion, the December 16 meeting adjourned without a vote having been taken on position limits.[1] The discussion continued at the commission's January 13, 2011 meeting, and a proposed rule passed 4-1, with Commissioner Sommers voting against the proposal. Significant requirements in the proposal can be found here.

In order to clarify the proposal in terms of "major physical commodity derivatives," the commission published tables showing 2010 average open interest, and the non‐spot month position limit using the proposed formula. Also published was a 5-page note explaining the methodology and specifics of the proposal, including:

  • Definition of "referenced contracts;"
  • Relative size conversion factors;
  • Delta adjustments and delta coefficients for options;
  • The two-step process for calculating of non-spot month limits; and
  • An explanation of each component of the position limits tables.

Related Documents: Proposed Non-Spot Month Position Limits; Explanatory Notes

References

  1. Open Meeting on Eighth Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on March 2, 2011.

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