Sima Saran Ahuja | Bloomberg LawStatement of Dissent, Position Limits for Futures and Swaps, Commissioner Scott D. O'Malia (Oct. 18, 2011) Scott D. O'Malia, a Commissioner of the Commodity Futures Trading Commission (CFTC), dissented from the CFTC's adoption of a final rule on position limits for futures and swaps primarily because he disagreed with the CFTC's "restrictive" interpretation of Section 4A of the Commodity Exchange Act (CEA). Commissioner O'Malia contended that the CFTC did not balance position limits as "necessary and effective" against the "identifiable burdens" of "excessive speculation" on the liquidity and price discovery function of the futures and swaps markets. Specifically, Commissioner O'Malia explained that he dissented from the rule because the CFTC implemented it without an "objective factual analysis" or "necessary data" to determine whether the rule will effectively prevent or deter "excessive speculation." Moreover, in his view, the public rulemaking process was unproductive and "plagued by internal and public debates" regarding the CFTC's motives for implementing the final rule.
Position Limits Rule
CFTC Ignored Congressional Intent
Impact on Additional Regulatory Provisions
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