Position Limits - Exemptions

Market participants may be eligible to receive an exemption from Position Limits in accordance with Rule 559 based on having

1. bona fide hedging positions (as defined in CFTC Regulation §150.1);
2. non-enumerated bona fide hedging positions; and/or
3. spread positions.

Market participants seeking an exemption from Position Limits must obtain an application form from the Market Regulation Department (the Department) via the email addresses listed in the following Market Regulation Advisory Notice. They must file the required application and receive approval from the Department prior to exceeding such limits. However, it will not be a rule violation if a participant who has exceeded the limits and files the required application for enumerated or non-enumerated bona fide hedging positions with the Department within five (5) business days after assuming the position. An application filed after exceeding a limit must include an explanation of the sudden or unforeseen bona fide hedging need.

The Department may approve, deny, condition or limit any exemption request based on various factors, including, but not limited to, the applicant’s business needs and financial status. Market participants who seek extension of the exemption must annually file an updated application no later than one year following the approval date of the most recent application.

In the event the positions in excess of the limits are not deemed to be exemption eligible, the applicant and clearing firm will be in violation of speculative Position Limits for the period of time in which the excess positions remained open.

For official regulatory guidance, reference the applicable Market Regulation Advisory Notice.