Excessive speculation

Excessive speculation in any commodity under contracts of sale of such commodity for future delivery made on or subject to the rules of contract markets or derivatives transaction execution facilities, or swaps that perform or affect a significant price discovery function with respect to registered entities causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity. For the purpose of diminishing, eliminating, or preventing such burden, the Commission shall, from time to time, after due notice and opportunity for hearing, by rule, regulation, or order, proclaim and fix such limits on the amounts of trading which may be done or positions which may be held by any person, including any group or class of traders, under contracts of sale of such commodity for future delivery on or subject to the rules of any contract market or derivatives transaction execution facility, or swaps traded on or subject to the rules of a designated contract market or a swap execution facility, or swaps not traded on or subject to the rules of a designated contract market or a swap execution facility that performs a significant price discovery function with respect to a registered entity, as the Commission finds are necessary to diminish, eliminate, or prevent such burden. In determining whether any person has exceeded such limits, the positions held and trading done by any persons directly or indirectly controlled by such person shall be included with the positions held and trading done by such person; and further, such limits upon positions and trading shall apply to positions held by, and trading done by, two or more persons acting pursuant to an expressed or implied agreement or understanding, the same as if the positions were held by, or the trading were done by, a single person. Nothing in this section shall be construed to prohibit the Commission from fixing different trading or position limits for different commodities, markets, futures, or delivery months, or for different number of days remaining until the last day of trading in a contract, or different trading limits for buying and selling operations, or different limits for the purposes of paragraphs (1) and (2) of subsection (b) of this section, or from exempting transactions normally known to the trade as “spreads” or “straddles” or “arbitrage” or from fixing limits applying to such transactions or positions different from limits fixed for other transactions or positions. The word “arbitrage” in domestic markets shall be defined to mean the same as “spread” or “straddle”. The Commission is authorized to define the term “international arbitrage”.

( Sept. 21, 1922, ch. 369, § 4a , as added June 15, 1936, ch. 545, § 5 , 49 Stat. 1492 ; amended July 24, 1956, ch. 690, § 1 , 70 Stat. 630 ; Pub. L. 90–258 , §§ 2–4, Feb. 19, 1968 , 82 Stat. 26 , 27; Pub. L. 93–463, title IV , §§ 403, 404, Oct. 23, 1974 , 88 Stat. 1413 ; Pub. L. 94–16, § 4 , Apr. 16, 1975 , 89 Stat. 78 ; Pub. L. 97–444, title II, § 205 , Jan. 11, 1983 , 96 Stat. 2299 ; Pub. L. 102–546, title IV, § 402(1)(A) , (2), Oct. 28, 1992 , 106 Stat. 3624 ; Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(4)] , Dec. 21, 2000 , 114 Stat. 2763 , 2763A–407; Pub. L. 110–234, title XIII , §§ 13105(a), 13203(g), May 22, 2008 , 122 Stat. 1434 , 1439; Pub. L. 110–246, § 4(a) , title XIII, §§ 13105(a), 13203(g), June 18, 2008 , 122 Stat. 1664 , 2196, 2201; Pub. L. 111–203, title VII, § 737(a) –(c), July 21, 2010 , 124 Stat. 1722 , 1725.)