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In Pensions & Investments Hedge Funds Attorneys Discuss Potential Issues for Asset Managers on the CFTC’s Reproposed Position Limits

Practices: Hedge Funds, Compliance for Hedge Funds, Asset Management, Derivatives & Commodities

A May 29 article in Pensions & Investments reports that the CFTC’s current reproposal for speculative position limits on certain physical commodity futures could present compliance issues for asset managers. The piece quotes hedge funds partner Deborah Monson and hedge funds associate Jeremy Liabo (both of Chicago). The article highlights that pension funds and other investors may need to file with the CFTC for an aggregation exemption to avoid exceeding position limits. “I think most people know this position limit proposal is lurking, but the aggregation exemption filing requirement is under the radar,” states Ms. Monson. What makes the aggregation component of the proposal so important is that it would require a pension fund and its manager “to aggregate all positions in accounts or funds for which that investor directly or indirectly either controls trading or holds a 10% or greater ownership interest, as well as the positions of any other investor with whom (they) trade,” adds Mr. Liabo in the piece.

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