The UK's new position limits regime: what changes on 6 July

A narrower focus and cleaner structure

On 6 July 2026, the UK's position limits regime changes significantly, and the most important shift is structural.

Under MiFID II, position limits applied to a wide universe of commodity derivative contracts. Firms were required to constantly monitor and report on hundreds of diverse products, many of which posed little real systemic risk. The FCA concluded that this created significant regulatory burden without proportionate benefit, and that hard caps on smaller or developing contracts frequently choked off liquidity and impaired market growth. The new regime narrows the scope deliberately.

What's in scope

The FCA identified 14 critical contracts across LME and ICE Futures Europe where the potential for macro-economic disruption from disorderly trading is most severe. Position limits will apply to these contracts. Everything else falls outside the hard cap framework.

Based on the FCA’s consultation paper, those contracts are as follows:

Related contracts, and the accountability layer

The 14 critical contracts are not the full picture. A broader set of related contracts are also in scope, and this is where much of the operational complexity arises.

Depending on the venue definitions, related contracts may include options, mini contracts, Balmo and mini-Balmo contracts, inter-contract spreads, and cash-settled look-alike contracts linked to a critical contract.

The regime also introduces accountability thresholds alongside the limits themselves. These thresholds act as an early-warning mechanism: where a firm’s position exceeds a threshold, the venue may request further information and may issue directions, meaning firms need to monitor both the hard limit and the accountability threshold below it.

Exchange-led, FCA-backstopped

The structural change is also worth understanding on its own terms. This is not expected to operate as a dual-layer regime where separate regulatory and exchange limits run in parallel. Under the new model, ICE and LME set and administer the primary limits directly, under FCA oversight. The FCA retains a backstop intervention power, but day-to-day responsibility for limit calibration and administration moves to the exchanges.

In practice, this brings the UK somewhat closer to the CFTC model in the US, where exchanges play a central role in administering position-management frameworks around a defined set of core contracts. Rather than applying broad-based limits across all commodity derivatives, the new UK regime focuses on a smaller set of critical contracts and their related products.

What firms need to do before 6 July

Firms need to ensure their monitoring covers the critical contracts and any related contracts in scope, with the appropriate aggregation and netting logic applied across both. They also need processes for tracking changes to the contract universe over time, since related contracts and associated thresholds may be added or amended as markets evolve.

For firms currently running MiFID II-based monitoring, the narrower scope brings some operational relief, but the aggregation requirements across related contracts still introduce complexity that needs to be correctly configured ahead of the implementation date.

For FundApps clients, these changes are being handled as part of the Position Limits service. We are working with our partner, FIA Tech, to incorporate the new FCA contract definitions, aggregates, ratios, and associated limits into our monitoring framework, and to ensure the appropriate aggregation, netting, and related-contract handling is in place ahead of 6 July.

Where possible, we expect to release updates ahead of the implementation date so clients can see what is changing and how it may affect their monitoring. We will also continue to keep clients informed as further venue and FCA guidance becomes available.