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.
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:
Contract Name |
Underlying Commodity |
Settlement Method |
|
LME Aluminium |
Metal | Physically Settled |
| LME Copper | Metal | Physically Settled |
| LME Lead | Metal | Physically Settled |
| LME Nickel | Metal | Physically Settled |
| LME Tin | Metal | Physically Settled |
| LME Zinc | Metal | Physically Settled |
| London Cocoa Futures | Agricultural | Physically Settled |
| Robusta Coffee Futures | Agricultural | Physically Settled |
| White Sugar Futures | Agricultural | Physically Settled |
| UK Feed Wheat Futures | Agricultural | Physically Settled |
| Low Sulphur Gasoil Futures | Energy | Physically Settled |
| UK Natural Gas Futures | Energy | Physically Settled |
| Brent Crude Futures | Energy | EFP, with option to cash settle |
| T-West Texas Intermediate | Energy | Cash Settled |
The 14 critical contracts are not the full picture. Related contracts are also in scope, and this is where most of the operational complexity sits.
Related contracts include, at a minimum, options on critical and related contracts, mini contracts, Balmo and mini-Balmo contracts, inter-contract spreads that include a critical contract leg, and cash-settled look-alike contracts linked to a critical contract.
The regime also introduces accountability thresholds alongside the limits themselves. Where a firm's position exceeds a threshold, additional reporting requirements are triggered, meaning firms need to be monitoring at two levels - the limit, and the threshold below it.
The structural change is also worth understanding on its own terms. This is not a dual-layer regime where separate regulatory and exchange limits run in parallel. Under the new model, ICE and LME set the primary limits directly, under FCA oversight. The FCA retains a backstop intervention power, but the day-to-day limit-setting responsibility moves to the exchanges.
This brings the UK closer to the CFTC model in the US, which has long focused on a defined set of core contracts rather than applying broad-based limits across all commodity derivatives. The new regime corrects for that.
Firms need to ensure their monitoring covers the critical contracts and any related contracts in scope, with the right aggregation and netting logic in place across both. They also need a process for tracking changes to the contract universe over time, since related contracts can be added or amended as markets develop.
For firms currently running MiFID II-based monitoring, the narrower scope brings some relief, but the aggregation requirements across related contracts add complexity that needs to be correctly configured before the change date.
For FundApps clients, these changes are handled as part of the Position Limits service. We're working with our partner, FIA Tech, to identify critical and related contracts and their associated limits, and updating our rules to ensure the right aggregation, delta adjusting, and netting is in place ahead of 6 July.
Where we can, we'll release updates ahead of the change date so clients can see what's coming and how it affects their monitoring, and we'll keep clients informed as further information from the FCA becomes available.