WASHINGTON, D.C. – U.S. Senator Pat Roberts, R-Kan., Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, today praised the U.S. Commodity Futures Trading Commission (CFTC) for finalizing a rule on position limits for derivatives. The final rule passed by a vote of 3-2.
“I appreciate the CFTC’s careful review and consideration of stakeholders’ input, particularly from our nation’s agricultural end-users, when crafting this final rule,” said Chairman Roberts. “This rule contains a clear definition of what practices constitute a bona fide hedge and therefore are not subject to position limits. This is critical to ensure all commercial end-users have the ability to effectively hedge commercial risk. I thank Chairman Tarbert for keeping his word to me and American agriculture to finalize this rule.”
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 mandates the CFTC, as it finds necessary, establish limits on speculative positions not considered bona fide hedges. Since 2011, multiple iterations of the rule have either been vacated by a federal court or never finalized. Today’s rule clarifies and broadens the list of enumerated hedges; establishes position limits in the spot month for 25 physically settled core reference future contracts, cash settled futures, options on futures and economically equivalent swaps; and provides end-users flexibility in seeking approval for non-enumerated hedging exemptions.
Roberts held a nomination hearing for Mr. Tarbert in March 2019 and asked for his commitment to finalize a rule on position limits during his chairmanship. To watch the hearing and read testimony, click here.
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