Printer Friendly

CME Group Statement Regarding Position Limits.

CHICAGO, Oct. 19, 2011 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives exchange, today released the following statement regarding the Commodity Futures Trading Commission (CFTC)'s rule making on position limits:

"CME Group commends the Commission and staff of the CFTC for their efforts to respond to the more than 13,000 comment letters filed on the CFTC's position limits proposal. We also appreciate the Commission's recognition of the need to establish equivalent position limits in the important spot month for physically-settled futures and those cash-settled futures and swaps which are based on the daily and final settlement prices of the primary physically-delivered price discovery contracts. With the lone exception of natural gas, the CFTC's interim final rule will appropriately limit opportunities for inter- market manipulation and abuse in the spot month where the risk of misconduct and artificial prices is most acute.

"The Commission's decision also rectifies for almost all physical commodities the inherent flaws in its original proposal, which would have allowed a single market participant to control in the spot month cash-settled positions equal to 125 percent of the deliverable supply in a covered commodity. We remain concerned that various provisions of the final rule relating to net portfolio and anticipatory hedging strategies will constrain legitimate risk management activities by commercial participants. We intend to work with the CFTC as soon as possible to ensure that deliverable supply is properly defined and calculated and that existing spot month position limits are adjusted to reflect current market conditions. This is critical given that existing limits in some products are more than 10 years old. We also remain concerned that the Commission has not yet explained its reasons for concluding that its adopted limits especially in non-spot months are necessary or appropriate and that the rules will encourage market participants to seek hedging and risk management alternatives outside of the United States."

As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex electronic trading platform and its trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the world's leading central counterparty clearing providers, which offers clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.

CME Group is a trademark of CME Group Inc. The Globe Logo, CME, Globex and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are registered trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (NASDAQ: CME) and its products can be found at www.cmegroup.com.

CME-G

SOURCE CME Group
COPYRIGHT 2011 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2011 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 19, 2011
Words:783
Previous Article:Jones Lang LaSalle's Global Sustainability Perspective Highlights Trends in Corporate Energy and Carbon Reporting.
Next Article:Chobani Names Leo Burnett New York as Advertising Agency of Record.
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters