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    CFTC Amends Position Limit Rules for Security Futures Products

    September 27, 2019

    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

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