On July 29, the Commodity Futures Trading Commission’s Energy and Environmental Markets Advisory Committee discussed the agency's proposed rules on position limits. William McCoy, managing director and counsel in the legal and compliance department of Morgan Stanley, represented FIA at the meeting. McCoy urged the CFTC to implement federal position limits in phases, beginning with spot month limits. The CFTC then should conduct a rulemaking on whether limits outside the spot month are necessary and appropriate. McCoy said FIA believes this would allow the CFTC to concentrate its resources on the administration of spot-month limits, where there may be more of a threat of manipulation than there is further out the curve. This approach also would give the CFTC more time to evaluate current futures and swaps data to understand market size and liquidity and permit further consideration of the effectiveness of accountability levels in lieu of hard position limits outside the spot month.
