CFTC proposes new position limits on derivatives, futures contracts

The Commodity Futures Trading Commission is proposing new position limits on futures and derivatives contracts.

CFTC Chairman Heath Tarbert says the proposal is a way to protect agriculture, energy, and metals markets from excessive speculation.

Tarbert says the limits would cap positions that speculators – but not people with real hedging needs – can take in the futures markets. The limits are proposed for products such as corn, soybeans, wheat, cotton, and cattle, as well as energy sources like oil and natural gas.

The proposal would also end the “risk management” exemption that allows banks, hedge funds, and trading firms to take large speculative positions in agriculture markets, according to Torbert.

Senate Agriculture Committee Democratic Ranking Member Debbie Stabenow of Michigan says she wants the CFTC to strengthen the rule, adding consumer and market protections. House Agriculture Republican Ranking Member Michael Conaway of Texas says he’s cautiously optimistic that reasonable position limits can offer market certainty.

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