CFTC proposes rule update for U.S. markets in security futures products

24 July 2018

CFTC unanimously approved a proposal to update a rule impacting exchanges that list security futures products SFPs. The proposal has the potential to provide greater liquidity in SFP trading, which would facilitate risk management for entities using SFPs.

The proposed rule would update an outdated security futures rule that has not kept pace with position limits on security options, which are under the jurisdiction of the Securities and Exchange Commission. The proposed updates would provide exchanges that list SFPs with greater discretion in setting limit levels, allowing the exchanges to provide a more effective risk management tool. This is the first update to the CFTC SFP position limits and position accountability requirements since they were originally issued in 2001.

Specifically, the proposed CFTC SFP Rule will:

• increase the default level of equity SFP position limits to 25,000 (100-share) contracts, from 13,500 (100-share) contracts; and
• modify the criteria for setting a higher level of position limits and position accountability levels.

Full press release

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