Position Limits

2014-10-13

The Dodd-Frank Act grants the CFTC the authority to set position limits, as the Commission finds necessary to deter and prevent excessive speculation that causes sudden or unreasonable fluctuations or unwarranted changes in the price of a commodity.

MFA’s members rely on fair, competitive, and transparent markets that respond to fundamental factors to conduct their businesses. Hedge funds play a vital role in commodity futures markets by assuming the price risk from commercial participants (hedgers) on both the long and short sides of the market, and by providing liquidity that facilitates risk transfer and price discovery for businesses around the world.

Research and experience demonstrate that position limits have not reduced price volatility or prevented market manipulation, and it is not clear how the proposed federal limits would achieve their intended purpose with respect to energy markets.

Proposed federal limits likely will result in decreased market liquidity, which in turn would impair the ability of commercial market participants to hedge against rising prices.

下一篇:Enterprise Value