Risk Management

By Todd Kemp, Senior Vice President, Treasurer The CME Group on Jan. 27 notified the Commodity Futures Trading Commission (CFTC) that it intends to increase both spot-month and all-months-combined speculative position limits effective March 15.  The change is intended to coincide with the effective date of CFTC’s final rule that revises speculative position limits for corn, wheat, soybeans and other agricultural commodities, and imposes such limits on some energy, metals and financial futures contracts for the first time.  For corn, wheat and soybean contracts, and subject ... Read More

By Todd Kemp, Senior Vice President, Treasurer At the culmination of a 10-year process and after several false starts, the Commodity Futures Trading Commission (CFTC) on Jan. 14 published its 258-page final rule on speculative position limits in the Federal Register. The CFTC approved the final rule last year on Oct. 15, completing one of the last unfinished pieces of regulatory business to implement under the 2008 Dodd-Frank Act. The vote split along party lines, with Republican Chairman Heath Tarbert and Commissioners Brian Quintenz and Dawn Stump in favor; and Democratic ... Read More

By Todd Kemp, Senior Vice President, Treasurer On Oct. 1, Commodity Futures Trading Commission (CFTC) chairman Heath Tarbert announced that the agency is accepting nominations for a subcommittee of its Agricultural Advisory Committee (AAC) to evaluate its policy on  implementing amendments to enumerated agricultural futures contracts with open interest, including: How changes to terms or conditions of futures contracts affect the value of existing positions; How the exchanges should assess market conditions in deciding, announcing or implementing amendments; and The ... Read More

By Sarah Gonzalez, Director of Communications and Digital Media Climate change could pose systemic risks to the U.S. financial system, according a report published by a Commodity Futures Trading Commission (CFTC) advisory panel on Sept. 9. “The central message of this report is that U.S. financial regulators must recognize that climate change poses serious emerging risks to the U.S. financial system, and they should move urgently and decisively to measure, understand and address these risks,” noted the report, dubbed Managing Climate Risk in the U.S. Financial System. The report, ... Read More

President Trump this week nominated a Housing and Urban Development Department (HUD) senior adviser to serve as a member of the Commodity Futures Trading Commission (CFTC). If confirmed by the Senate, Robert B. Bowes, a Republican, would succeed current Republican commissioner Brian Quintenz, whose term technically expired in April, but who is allowed under law to continue to serve until the end of the year.  It widely is anticipated that Quintenz, who was confirmed and sworn into office at the CFTC in August 2017, will leave the agency in late October. The White House announcement ... Read More

By Todd Kemp, Senior Vice President, Treasurer The NGFA on July 13 submitted an official statement to the Commodity Futures Trading Commission (CFTC) responding to its proposal that would update the agency’s rules governing bankruptcy proceedings involving futures commission merchants (FCMs) and designated clearing organizations (DCOs).  The CFTC proposal would be the first update of its bankruptcy regulations since 1983 and would modernize policies and procedures and strengthen existing CFTC practices that have been employed in previous insolvencies. The proposal was of ... Read More

By Todd Kemp, Senior Vice President and Treasurer Following consultation with the NGFA’s Risk Management Committee and other customers, the CME Group in 2019 updated its rule that governs delivery procedures – and, more specifically, barge load-out procedures at elevators regular for delivery – during anticipated closures of the Illinois River waterway for lock-and-dam repairs scheduled this summer. Provisions of the rule will take effect if repairs result in a majority of regular shipping stations being obstructed for 15 days.  CME has stressed that the rule is designed to have ... Read More

As reported in last week’s NGFA Newsletter, the association on May 15 submitted a formal statement to the Commodity Futures Trading Commission (CFTC) on the agency’s proposed rule implementing speculative position limits. The NGFA statement  was filed too late that day to include a link in the newsletter; it can be accessed here. See the May 15 article for a more detailed description of the contents of the NGFA statement. The CFTC now will analyze numerous comments submitted by the public and incorporate changes before proceeding to a vote on a final rule. It is ... Read More