The Commodity Futures Trading Commission (CFTC) proposed new position limits for commodity derivatives last week, but that proposal isn't expected to have much impact on most corporations that use derivatives to hedge risks. Meanwhile, companies are still waiting to learn whether U.S. banking regulators will require derivative end users to post margin.
The CFTC's proposal to limit the number of contracts a single firm can hold in 28 different commodities follows a court's rejection of a previous position-limit proposal from the commission.
Luke Zubrod, a director at Chatham Financial, downplayed the importance of the CFTC's proposal for corporate end users, noting that the limits involve agricultural, metals and energy contracts. “The big areas of interest rates and foreign currencies are untouched by the position limits rules,” Zubrod said.
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Susan Kelly
Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.
