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CFTC Interim Rule Limits Futures and Swaps Positions; Challenge Filed, Delay Rejected

by Ari Peskoe After months of contentious debate, which included multiple delays, complaints to the U.S. Commodity Futures Trading Commission (CFTC) Inspector General, and a 3-2 vote along party lines, the CFTC’s interim final rule on position limits for futures and swaps was published in the Federal Register on November 18, 2011.  Position limits apply to four New York Mercantile Exchange energy contracts: Henry Hub Natural Gas (NG), Light Sweet Crude Oil (CL), New York Harbor Gasoline Blendstock (RB) and New York Harbor Heating Oil (HO).  Two weeks later, the International Swaps and Derivatives Association (ISDA) and the Securities Industry and Financial Markets Association (SIFMA) filed a legal challenge to the rule, claiming that the CFTC lacks the authority to set position limits and alleging various procedural flaws in the rulemaking.  On January 4, the CFTC rejected a request by the two trade groups to delay implementation pending...

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Welcome to McDermott’s Energy Business Law Blog

Welcome to McDermott’s Energy Business Law Blog.  Our objective in this forum is to provide our readers with insights into the evolving regulatory, business, tax and legal issues affecting the U.S. and international energy and commodities markets.  Contributions to this blog will be a collective effort of lawyers and professional staff that are part of McDermott's broad-based energy practice, with ten U.S. and seven European offices, and a strategic alliance in China.  We will bring to bear our experience across the global energy sector, which spans exploration and production, oil, gas and refined products pipelines, storage and processing facilities, liquefied natural gas, refining and petrochemicals, electric power generation and transmission, renewable and alternative energy (including wind, solar, biofuels and others), trading and regulatory, carbon and emissions, metals and agriculture.  We hope you find our energy blog to...

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