On Jan. 22 FIA provided the Commodity Futures Trading Commission with its views on certain issues related to the CFTC’s proposed position limit and aggregation rules. The letter was submitted in response to the CFTC’s request for additional comments on the rules in conjunction with a December 2014 meeting of the CFTC’s Agricultural Advisory Committee. In the letter FIA commended the CFTC for making “important modifications” to the proposals, but encouraged the CFTC to implement the rule in phases and make additional changes to minimize the impact on commercial hedgers. The recommended changes included:
- Set hard limits only for spot months and rely on exchanges to set position accountability levels for non-spot months
- Provide the industry with nine months to comply with the rules once finalized and coordinate the implementation with European regulators as they implement a position limits regime in Europe.
- Expand the definition of bona fide hedging to include common risk management practices used by commercial enterprises and permit exchanges to grant hedge exemptions, subject to CFTC review.
- Rely on exchanges to estimate deliverable supply
