CFTC Amends Position Limit Rules for Security Futures Products
CFTC finalized the rule amending the position limit requirements applicable to security futures products (SFP). The final rule will also provide designated contract markets (DCMs) with the discretion to apply limits to either a person's net position or a person's position on the same side of the market. The rule includes position limit requirements and related guidance and acceptable practices for DCMs to apply in adopting position limits for SFPs based on products other than an equity security. The final rule is effective from November 26, 2019.
The position limit rules are being amended by:
- Increasing the default maximum level of equity SFP position limits that designated contract markets (DCMs) may set
- Modifying the criteria for setting a higher position limit and position accountability level by relying primarily on estimated deliverable supply
- Adjusting the time during which position limits or position accountability must be in effect
On July 31, 2018, CFTC published a proposal to amend regulation 41.25 to update the position limit rules for SFPs to provide regulatory comparability with equity options, foster innovation by providing a framework for position limits on SFPs that are not covered under the existing rules, and provide flexibility to DCMs in setting position limits for such products. CFTC received one substantive comment letter on the proposal, from OneChicago, LLC. CFTC has considered comments received in response to the proposal and is adopting the proposal with a few modifications.
Related Link: Federal Register Notice
Effective Date: November 26, 2019
Keywords: Americas, US, Banking, Securities, Position Limit, Designated Contract Markets, Security Futures Product, CFTC
Related Articles
EBA Updates List of Validation Rules for Reporting by Banks
EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.
EBA Responds to EC Call for Advice to Strengthen AML/CFT Framework
EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).
NGFS Advocates Environmental Risk Analysis for Financial Sector
NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.
MAS Issues Guidelines to Promote Senior Management Accountability
MAS published the guidelines on individual accountability and conduct at financial institutions.
APRA Formalizes Capital Treatment and Reporting of COVID-19 Loans
APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.
SRB Chair Discusses Path to Harmonized Liquidation Regime for Banks
SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.
FSB Workshop Discusses Preliminary Findings of Too-Big-To-Fail Reforms
FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms.
ECB Updates List of Supervised Entities in EU in September 2020
ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.
OSFI Identifies Focus Areas to Strengthen Third-Party Risk Management
OSFI published the key findings of a study on third-party risk management.
FSB Extends Implementation Timeline for Framework on SFTs
FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.
