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October 15, 2020

The CFTC’s Long Overdue Position Limits Rule Will Not Stop Excessive Speculation But Will Raise Costs on American Families, Farmers and Producers


Thursday, October 15, 2020

Contact: Pamela Russell at

Washington, D.C.  –  Joseph R. Cisewski, Better Markets’ Senior Derivatives Consultant and Special Counsel, today condemned the Commodity Futures Trading Commission’s (CFTC) final position limits framework for derivatives on physical commodities, explaining that it will increase costs on working families, farmers and producers:

“After ten years of rulemaking, the CFTC today finalized a position limits framework that does far too little to limit excessive speculation in the commodity derivatives markets. The final framework is a slap in the face to working Americans continuing to struggle through the deepest economic crisis in generations. Families will be left with a higher bill for everything from the groceries feeding their families to the gas fueling their cars and trucks. Worse, this ‘speculative tax’ will continue to be hidden by an opaque regulatory framework riddled with loopholes and designed to permit, if not encourage, excessive speculation in almost all of the major derivatives markets on agricultural, energy and metals commodities, as we detailed in our comment letter to the CFTC’s proposal and our recent fact sheet.

“Judging from statements in this morning’s meeting, the CFTC’s position limits framework continues to suffer from the three fatal flaws of the 2020 proposal. First, it institutes or permits position limits that are so high, or that are so narrowly applied, that they will fail to prevent excessive speculation outside of the most egregious and patently unlawful cases of manipulation. Second, it fails to address disruptive speculation caused by exchange-traded funds and similar vehicles. Yet, as we have repeatedly emphasized, Congress explicitly amended the Commodity Exchange Act to require position limits on physical commodities and authorize limits on any ‘group or class of traders.’

“Finally, the CFTC far too significantly delegates its statutory responsibilities to a small number of for-profit exchanges. There is every reason to doubt the efficacy of this approach. The derivatives exchanges must consider, if not prioritize, shareholder interests at the same time that they are charged with protecting the public interest by preventing excessive speculation. Because limiting speculation is tantamount to limiting trading revenues, there is an inescapable conflict of interest that requires exchanges to improperly balance profits against the public interest.

“For all of these reasons, and numerous others explained in our comment letter and fact sheet, the CFTC’s final position limits framework fails to achieve its supposed fundamental objectives to prevent purely speculative traders from hijacking commodities markets and accumulating massive derivatives positions that enable manipulation and other market distortions. That translates to higher profits for Wall Street banks and speculators and higher costs for the rest of us, including the working families and farmers and producers actually involved in the productive economy.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit  

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