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CME Group Chairman Terry Duffy reacts to the new rule passed on position limits and how it will impact the exchange’s customers.
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-- a controversial federal rule that's just been approved by regulators already.
Receiving some harsh criticism the -- will clamp down speculative trades which have been blamed for driving up the price -- -- gasoline energy in the last several.
Really they've -- live in Chicago I first entered.
View with CME group chairman Terry Duffy after this rule change Sandra.
-- day in a -- yet this is really crucial to this industry and that's why are bringing in mr.
commodities Terry Duffy chairman of the CME group here in Chicago.
I also friend of Fox Business is Terry I mean this is a big change for the industry.
Is it politically charged how are you for her against this -- Change well -- isn't politically charged a little bit -- you know I I believe and I think many believe that.
Congress is intent was that just a CFTC.
Could issue position limits if they have a finding.
Well they've kind of read it a little bit differently so they've gone forward with.
Intimate Benjamin final rule -- -- yesterday to create spot position limits were all energy agricultural and metals products.
The funny thing about that is -- that we already have position limits and all of our agricultural products today so.
One thing that did happen was on the energy products themselves they were originally proposing a five times limit.
For cash settled versions that settled against the physically product and energy.
We thought this could be very detrimental.
That the commission didn't vote yesterday to go to one no one would -- the same position want for cash subcontract.
Bruce of physically so Patrick would accept a -- -- so I find that you know for most parts of the.
So in a way you're saying it's somewhat fair however it's gonna have a big impact on your biggest -- -- you know He had He had -- the farmers the airlines.
Also the financial institutions like Morgan Stanley Goldman Sachs who do you see impacting the most of that being impacted and I know.
People they used a product him and we have people that have anticipatory hedging needs that we're not quite sure how they're gonna be defined going forward.
We've yet that the blood define what the deliverable supply is and that's how you can decide what the actual position woman is.
So they have to take a listen to a council we don't know what the actual number is -- Sandra.
Once we find that out we'll have more clarity and that.
Even though you you say it's somewhat fair and it was a divided vote -- was greeted CO.
Do you feel -- legally elected CFTC has the right and -- sort of rules and regulations.
Because they are basing this on speculation -- that's never really been proven.
To drive -- pricing I'll I'll leave that up for the lawyers Sandra if they have the legal right to do that are not.
They believe they have them the intent by congress to go forward to impose is that the position limits you know I guess lawyers can anticipated.
Anywhere they want other critics say could actually and am currently drive prices higher you a believer in that.
Not know I'm not a believer in that I don't think that would drive prices higher.
So overall after you've had a nice to look over this it's been approved by the CFTC they're going to impose these position limits.
You're somewhat OK with this change for traders I'm okay with the conditional limits changes I'm not okay with the overall position limits rule.
Going back to what you said earlier what is what is the impact that ultimate client going to be we won't have those answers until we know exactly what the hard limits going to be.
So when we get there well whoa we'll analyze that I have given enough slack given enough slack for being a White Sox fans so while we'll let Terry Duffy chairman of the CME group on that thank you so -- thank you -- appreciate very much -- -- I -- -- -- back -- you guys in the studio as Terry Duffy is everything commodity every lava and thank you Santa thanks to you -- to.
