Better Markets has for almost a decade called on the CFTC to lawfully implement a meaningful speculative position limits framework for derivatives (futures, options on futures, and swaps) referencing physical commodities. Although we are supportive of the CFTC’s attention to public interest concerns relating to speculative position limits and their effects on the pricing, integrity, and utility of the derivatives markets on physical commodities, the newest proposal only further delays the CFTC’s now decade-long rulemaking process by deferring too significantly to exchanges to establish, administer, and monitor position limits and opening too many avenues to avoid, if not evade, meaningful federal and exchange-determined position limits through expanded exemptions and delegations of authorities. For these reasons, among others, any final rulemaking adopted as a logical outgrowth of the CFTC’s proposal would, at best, obscure the lack of meaningful limits on speculation.
There are elements of the CFTC’s proposal that have merit and some would represent significant progress in implementing a federal position limits framework. However, the CFTC’s fifth proposal in ten years continues to suffer from significant legal and policy deficiencies that must be remedied before finalization. Read our full comments here, or by clicking the button below.