Back to General Resources

Commodity Futures Trading Commission Open Meeting

Commodity Futures Trading Commission

Open Meeting

Monday, September 16, 2019

Key Topics & Takeaways

  • Volcker Rule: Chairman Tarbert noted that the Commission approved revisions to the Volcker Rule in a private vote last week, in the seriatim Commissioners Benham and Berkovitz noted their dissent of the final rule.
  • Position Limits for Security Futures Products: The Commission unanimously approved the final rule to increase default position limits for security futures products in a 5-0 vote.
  • Public Rulemaking Procedures: The Commission unanimously approved a final rule to amend Part 13 of the Commission’s regulations to eliminate provisions that were redundant with the Administrative Procedures Act.

CFTC Commissioners

Opening Statements

Heath Tarbert, Chairman

In his opening statement, Tarbert noted that this would be his first public meeting as the chairman of the Commodity Futures Trading Commission (CFTC). He then stated that the Commission voted privately, through the seriatim process, to approve revisions to the Volcker Rule the previous week. Tarbert’s statement on the Volcker Rule revisions was published Commission’s website.

Tarbert then spoke in support of the two rulemakings being considered in the public meeting. He said the final rule amending position limits for security futures products (SFPs) would ensure comparable treatment by aligning SFP rules with the Securities and Exchange Commission’s (SEC) rules for equity options.

Tarbert explained that the second proposal being considered, to change Part 13 of the Commission’s regulations on public rulemaking procedures, would eliminate most of Part 13 and clarify that the CFTC’s rulemaking process would follow the Administrative Procedures Act. He also noted that he had asked staff to develop a plain-English description of how CFTC rulemaking works.

Other Commissioners

Commissioners Brian Quintenz, Rostin Benham, Dawn Stump and Dan Berkovitz all voiced their support for the two final rules being considered. Benham and Berkovitz also noted their dissent on the final revisions to the Volcker Rule that the Commission approved the week before.

Final Rule on Position Limits and Position Accountability for Security Futures Products

Greg Kuserk of the Division of Market Oversight provided a summary of the final rule on position limits and position accountability for SFPs, noting that the rules on SFPs had not been substantively changed since they were initially adopted in 2001. He explained that the final rule would raise the default net position limit for SFPs to 25,000 contracts, net or on the same side of the market, and provide the flexibility to adopt position limits above the default level if the estimated deliverable supply of the underlying security is greater than 20 million shares.

Quintenz noted that only comment letter was received on the proposal, but that this letter stated that without margin relief the proposed changes would not have much effect. Tom Leahy of the Division of Market Oversight replied that based on what staff has observed, liquidity and trading activity could be better, and that the rule being considered would allow DCMs to adopt larger positions. Quintenz said the rule is a “net positive, but because there could be other constraints, we may not see the full result of this position limit change absent other changes.”

The Commission approved the final rule in a 5-0 vote.

Final Rule on Public Rulemaking Procedures (Part 13 Amendments)

Herminio Castro of the Office of General Counsel outlined the proposed changes to Part 13 of the Commission regulations, stressing that Part 13 had not been amended since it was promulgated in 1976 even as the Administrative Procedures Act has been updated. He noted that the ability of the public to petition for rulemaking would not be eliminated.

The final rule was approved in a 5-0 vote.

Closing Statements

Tarbert, in his closing statement, said he would announce a new strategic plan for the CFTC in the coming weeks. He added that the plan would have five themes: 1) to strengthen the integrity and resilience of derivatives markets while fostering their vibrancy; 2) to regulate derivatives markets to promote the interests of all Americans; 3) to encourage innovation and enhance the regulatory experience for market participants; 4) to be tough on those that break rules; and 5) to improve the CFTC’s operational effectiveness.

For more information on this meeting, please click here.