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CFTC Reopens Comment Period on Position Limit Rulemaking

The Commodity Futures Trading Commission (CFTC) is reopening the comment period on a proposed rulemaking designed to limit speculative trading in the swaps markets.

The CFTC said Monday that it submitted a notice to the Federal Register to reopen the comment period for a position limit rulemaking for 45 days. The notice will appear in Wednesday's issue. The CFTC said it was reopening the comment period in anticipation of its Agricultural Committee meeting, which is scheduled for Dec. 9.

The commission first proposed a rule on position limits in November 2013 (see Daily GPI, Nov. 5, 2013). The rule, which is authorized under section 737 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, would clamp down on speculation in 28 selected physical commodity futures and swaps. Four energy contracts -- for Nymex Henry Hub Natural Gas, Nymex Light Sweet Crude Oil, Nymex New York Harbor Gasoline Blendstock and New York Harbor Heating Oil -- are among the 28.

The proposed rule calls for, among other things, limits on speculative positions in commodity contracts and their "economically equivalent" futures, options and swaps, and it would establish speculative limits on referenced contracts effective 60 days after publication of a final rule.

The CFTC extended the comment period twice this year, in May and June (see Daily GPI, June 27; May 27). The comment period for a separate proposed rulemaking by the CFTC -- to amend existing regulations setting out its policy for aggregation under the position limits rule -- was also extended in May and June.

The Commission is interested in updating position limits regulations to avoid incidents of market manipulation, like the ones that impacted the silver market in 1979-1980 and the natural gas market in 2006 (see Daily GPI, Dec. 22, 2011).

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