Willa Cohen Bruckner, partner in the firm’s Financial Services & Products Group, was quoted in Westlaw Derivatives Journal discussing the Commodity Futures Trading Commission’s (CFTC) new proposal for a position-limits rule. The CFTC decided to propose the new rule after a U.S. District Court vacated the previously adopted rule. The position-limits rule would set a maximum on the number of certain derivative contracts that can be held by a person or company for speculative purposes.
“What makes position limits such a thorny issue is that some speculation is necessary to provide liquidity for hedging transactions,” Ms. Bruckner said.
“The CFTC should not be too wooden in its treatment of bona fide hedging exemptions. It’s important to listen to the perspective of businesses who are using these markets and to understand what they consider to be hedging, because hedging can be a critical part of their business plan and their ability to service customers,” she added.