CFTC proposal on metal futures position limits draws criticism

Dec 21, 2010 | 12:42 PM |

Position limits that could affect domestically traded metals futures and options contracts continue to face criticism from industry participants and the Commodity Futures Trading Commission (CFTC).

The CFTC held its eighth public meeting last week to consider rules proposed under the Dodd-Frank Wall Street Reform and Consumer Protection Act, with the topic of position limits for commodity derivatives a main focus.

The 2010 Dodd-Frank Act broadened the power of the CFTC's mandate to set position limits and re-establish single-month and all-months-combined position limits for energy and metals markets. Domestic metal futures markets already are subject to spot-month limits.

Proposed spot-month position limits will be 25 percent of the deliverable supply of a given commodity, and non-spot-month position limits for each contract will be set on 10 percent of open interest below the first 25,000 contracts and 2.5 percent thereafter.....





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