Number of Firms Using Position Limits Databank Triples

Nov. 2, 2010 - PRLog -- Chicago IL – November 3, 2010 –   The number of firms using Position Limits Databank (PLD) has tripled since its' launch in 2Q 2009, and the Institute for Financial Markets estimates usage to increase by as much as 35% in the first quarter of 2011 as firms brace for new position limit rules mandated under the Dodd-Frank Reform Act. “The Databank can serve as a critical tool for firms as they monitor their compliance with new position limit rules,” said Michael C. Dawley, Managing Director and global head of futures clearing at Goldman Sachs, and an IFM Trustee.
   
The PLD is used by futures firms and hedge funds to set trade parameters and monitor positions to discover near-excess positions, and guard against exchange warnings, suspensions, fines or regulatory action. At present 30 firms subscribe to the PLD and four additional firms will be added this quarter.

The Dodd-Frank Reform Act will increase position limit compliance oversight and has given the Commodity Futures Trading Commission (CFTC) authority to set limits on designated contract markets, on Swap Execution Facilities, in OTC significant price discovery contracts and, in some cases, on foreign boards of trade. The CFTC plans to finalize limits by January 17, 2011 for energy and metals contracts, and April 17, 2011 for agricultural contracts. These new limits place pressure firms to immediately ramp-up monitoring capabilities to accommodate the new requirements.

The PLD is a low-cost data service created by the IFM, a nonprofit organization.  Development for the PLD was generously underwritten by Barclays, J.P. Morgan, UBS, Macquarie Futures, Morgan Stanley, Credit Suisse, Deutsche Bank, Goldman Sachs and Newedge. Live demonstrations of the service are being offered at the IFM Booth #1808-1810 at the Futures Industry Association’s 26th Annual Futures and Options Expo, November 3-4.

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The IFM is a nonprofit foundation that globally provides education, ethics and anti-money laundering training and static data services . The IFM is an independent affiliate of the Futures Industry Association, an industry trade group.