After many years of false starts with various proposals and amendments which ended up going nowhere, the publication of the Final Rule in the Federal Register should put to bed any confusion about what lies ahead for CFTC Position Limit rules. The first key date to bear in mind is the 15th March 2021. This is when the first set of changes will become active for the 9 legacy agricultural contracts. This will then be followed with federal position limits being applied to 16 new futures contracts.
This has been a long time in the making and we are regularly asked by our clients and prospects “are these changes actually happening? And if so, when?” Given this uncertainty, we wanted to set out the changes and relevant dates in a simple fashion here and then aim to tackle the detail in specific areas in subsequent blogs. If you would like to see these, the best way to do so is to subscribe to our blog on the RHS of the page.
For now, here are a few things to bear in mind:
| Type |
Change |
Effective Date |
Contract |
| Legacy Agricultural Contracts |
The rules modify federal spot, single and all month position limits. The rules eliminate the single and all-month distinctions and instead establish a non-spot month limit for 8 of 9 contracts |
15 March 2021 |
CBOT Corn (C) CBOT Oats (O) CBOT Soybeans (S) CBOT Wheat (W) CBOT Soybean Oil (SO) CBOT Soybean Meal (SM) MGEX Hard Red Spring Wheat (MWE) ICE Cotton No. 2 (CT) CBOT KC Hard Red Winter Wheat (KW) |
| Non-Legacy Agricultural Contracts |
The rules establish federal spot month position limits on new agricultural contracts and any associated referenced contracts (other than economically equivalent swaps) |
1 January 2022 |
ICE U.S. Sugar No. 11 (SB) ICE U.S. Sugar No. 16 (SF) CME Live Cattle (LC) |
| Non-Legacy Metal Contracts |
The rules establish federal spot month position limits on new metal contracts and any associated referenced contracts (other than economically equivalent swaps) |
1 January 2022 |
COMEX Gold (GC) COMEX Silver (SI) COMEX Copper (HG) NYMEX Platinum (PL) NYMEX Palladium (PA) |
| Non-Legacy Energy Contracts |
The rules establish federal spot month position limits on new energy contracts and any associated referenced contracts (other than economically equivalent swaps) |
1 January 2022 |
NYMEX Henry Hub Natural Gas (NG) NYMEX Light Sweet Crude Oil (CL) |
| NYMEX Light Sweet Crude Oil (CL) NYMEX New York Harbor ULSD Heating Oil (HO) NYMEX New York Harbor RBOB Gasoline (RB) |
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| Exchange Limits |
Establishing exchange-set position limits and exemptions, as well as data sharing between exchanges and the CFTC, as required by the Final Rule |
1 January 2022 |
Various |
| Economically equivalent swaps |
Swaps that are economically equivalent to covered futures contracts become subject to federal position limits |
1 January 2023 |
Various |