CFTC Chair to Deutsche Bank: Goldman's Cojones are Larger than Yours
Huh? Did anyone else see what they did there?
From the CFTC:
For Release: August 19, 2009
CFTC Withdraws Two No-Action Letters Granting Relief from Federal Speculative Position Limits on Soybeans, Corn and Wheat Contracts
Washington, DC – The U.S. Commodity Futures Trading Commission today announced that it is withdrawing two no-action letters that provided relief from federal agricultural speculative positions limits set forth in CFTC regulations (17 C.F.R §150.2).
“I believe that position limits should be consistently applied and vigorously enforced,” CFTC Chairman Gary Gensler said. “Position limits promote market integrity by guarding against concentrated positions.”
In CFTC Letter 06-09 (May 5, 2006), the agency’s Division of Market Oversight (DMO) granted no-action relief to DB Commodity Services LLC, a commodity pool operator (CPO) and commodity trading advisor (CTA), permitting the DB Commodity Index Tracking Master Fund to take positions in corn and wheat futures that exceed federal speculative position limits set forth in CFTC Regulation 150.2. Subsequently, in CFTC Letter 06-19 (September 6, 2006), DMO granted similar no-action relief to a CPO/CTA employing a proprietary commodity investment strategy that includes positions in Chicago Board of Trade corn, soybeans and wheat futures contracts. Among other things, DMO’s no-action position in both cases stated that any change in circumstances or conditions could result in a different conclusion. DMO has previously stated that the trading strategies employed by these entities would not qualify for a bona fide hedge exemption under the Commission’s regulations.
DMO will work with each of these entities as they transition to positions within current federal speculative limits. The withdrawal of these no-action positions is very specific and limited and does not affect any other no-action or regulatory positions taken by the CFTC or its staff with regard to these entities or other market participants.
Or in other words:
The U.S. Commodity Futures Trading Commission Thursday announced that it is withdrawing two no-action letters that provided relief from federal agricultural speculative positions limits set forth in CFTC regulations (17 C.F.R §150.2). The PowerShares DB Commodity Index Tracking Fund (DBC: 22.77 -0.19 -0.83%) and the PowerShares DB Agriculture Fund (DBA: 24.99 -0.40 -1.58%), will no longer be exempt from U.S. position limits in soybeans, wheat and corn, forcing a shift in their holdings to comply with federal trading restrictions.
Bloomberg reports, “The CFTC move will curtail the commodity holdings of PowerShares DB Commodity Index Tracking Fund, the largest broad- based commodity index fund in the U.S., and PowerShares DB Agriculture Fund, the largest agricultural exchange-traded fund. Both track Deutsche Bank indexes. The Deutsche Bank funds will have to comply with caps designed to keep a single investor from gaining too much control of the market, the Commodity Futures Trading Commission said today. The agency has been tightening restrictions on commodity speculation amid concerns it’s pushing up prices and increasing risks.”
The ex-Goldman head of the CFTC has not removed GS' exemption, has he? Maybe I missed that part. Maybe everyone else saw what they did there too. I only know this makes me want some bacon.