The U.S. Commodity Futures Trading Commission (CFTC) and U.S. futures exchanges set limits on the number of futures contracts that may be held or controlled by one person. CFTC and exchange rules also require “aggregation” of positions across multiple accounts in certain instances, but allow “disaggregation” of such accounts if certain narrow criteria are satisfied. While the CFTC and exchanges have historically had position limit, aggregation and disaggregation rules, the CFTC and U.S. futures exchanges have recently amended their rules to require persons seeking to disaggregate accounts that would otherwise be required to be aggregated to make certain notice filings with the CFTC and/or exchanges.1 Beginning August 14, 2017, CFTC staff no-action relief that had been issued relating to those notice requirements will expire,2 triggering CFTC notice filing requirements for fund managers seeking certain types of position limit disaggregation. The notice filing requirements of the U.S. futures exchanges were not subject to this no-action relief and may in some cases also require fund managers to make notice filings with the exchanges. Although industry groups have requested relief from the filing requirements, it is not yet clear whether that relief will be granted.
This Sidley Update provides an overview of the impact of the CFTC and futures exchange aggregation and disaggregation rules on fund managers.
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