The position-limits rules passed last year by the Commodity Futures Trading Commission (CFTC) landed with a thud. The rules propose to govern derivatives tied to 28 different commodities and limit both certain on-exchange futures as well as some off-exchange options on futures and swaps. Generally viewed as weak, the rules nevertheless drew protest — and a legal challenge — from financial industry members.
As that lawsuit winds its way through the court system, traders may be wondering what framework for enforcement will be used when — and if — the rules ultimately are implemented. Court cases discussing the conduct that constitutes market manipulation can serve as one place to look for guidance.
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Defining Market Manipulation
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