Bart Chilton has responded to Harvey Organ who emailed the CFTC Commissioner regarding the exemptions the CFTC will grant regarding position limits, as well the time-frame until the limits are actually implemented.
Chilton has advised that the definition of "swap" is scheduled to be completed by the CFTC on Nov 1st, meaning that position limits in spot month contracts would go into effect on Jan 1st 2012.
Chilton also states that the exemptions will only be granted for legitimate business risks with monthly reports mandated.
While not naming JP Morgan, Chilton implies that they will not be given an exemption, or the CFTC would be "simply allowing folks to do that they have done."
We know that most of our readers have been as skeptical as we have been regarding the CFTC's intentions, but if Mr. Chilton is not blowing smoke, it appears we all may be able to wish Blythe and friends a Happy New Year!
"The spot month limits go into effect in 60 days after we define swaps, which we are set to do on Nov. 1st.
The all month and aggregate limits (which will include swaps) is 12 months after the initial limits. We do not have swaps data (because that required a rule requiring reporting) so can't set those level yet, but the rule requiring that they will be set (and when and how) is now in place.
On exemptions, we will grant if it is proven that there is a legitimate business risk for each day of trading (a monthly report is mandated). The historical trading is one piece of what we may look at. However, that is not a loophole that automatically grants an exemption. If that were the case, we'd simply be allowing folks to do what they have done. That is clearly not what we have allowed.