ISDA/SIFMA Pre-Comment on Position Limits

ISDA/SIFMA

In a joint comment letter to the CFTC submitted prior to the issuance of the proposed rule, Isda and Sifma express "deep concerns" regarding the rules that the CFTC is considering and urge the agency to "make significant changes" to the proposed rule before making it public.

Among the letter's points are i) urging that the focus of the limits be solely to prevent manipulation or market disruption (as opposed to Chairman Gensler's view that limits are for preventing "excessive speculation); ii) imposing limits only on physically-settled contracts held in the spot month; iii) providing a larger limit for passive, unleveraged investment vehicles; iv) apply the aggregation exemption for accounts managed by independently controlled traders to financial entities; iv) urging the CFTC to adopt position accountability levels rather than hard limits until there is clarity that the US regime is commensurate with the approach taken by non-US jurisdictions.

Date

January 11, 2011

Cross References (links may require a Cabinet subscription)

Dodd-Frank Act, Title VII, Sec. 737