The CFTC has settled with Glencore Agriculture B.V. and Glencore Ltd $2 million for breaches of position limits in ICE cotton futures contracts, executed trades which are construed as wash trades, and making incorrect submissions. The CFTC press release can be found here and the order here.
Glencore are alleged to have broken position limits on an aggregate basis between the two entities, which are deemed to have been under the same “control”, in which case aggregate limits apply. Glencore also executed pairs of Exchange for Physical (EFP) transactions opposite each other in each of the entities. Although the trades were for “bone fide hedging purposes”, since the positions are not under independent control, they breach the non wash trade rules of the ICE exchange. Positions are to be reported in this situation using “Form 304”, which one two occasions overstated the quantities of its fixed price cotton cash positions.
In Europe, the mandatory position limits rules under MiFID II are in the process of “bedding in” (see here).