Alert November 20, 2012

CFTC Votes to Appeal Ruling Striking Down Position Limits Rule

The CFTC voted to appeal a federal court decision that vacated and remanded its rule imposing a position limits regime for derivatives contracts tied to twenty-eight different agricultural, metal, and energy commodities.  Ruling on a challenge filed by the International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association, the court held that the CFTC is required to determine that the rule is necessary and appropriate prior to adopting it.  Although the court’s decision does not preclude the CFTC from re-issuing the rule after making a finding of necessity, three of the CFTC’s commissioners voted to appeal the ruling, with two opposing.