Deutsche Bank’s PowerShares ETFs Face New Limits

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) and the PowerShares DB Agriculture Fund (DBA), 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.”

According to the CTFC website, the Division of Market Oversight (DMO) will work with 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.

CFTC Chairman Gary Gensler said. “I believe that position limits should be consistently applied and vigorously enforced. Position limits promote market integrity by guarding against concentrated positions.”

You can find the CTFC press release: HERE

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