Under Policy Statement PS25/1, ICE Futures Europe (ICE), the London Metal Exchange (LME), and other UK venues will each set their own methodologies, accountability frameworks, and reporting requirements. Each venue operates independently with its own approach to determining appropriate limits.
ICE and LME position limits replace FCA: Exemptions, new rules, and key dates
The shift is more than administrative. ICE will assume first-line authority for setting and enforcing position limits and accountability thresholds. The LME will do the same for metals markets. Each venue operates independently, with its own methodology for determining appropriate limits.
Critically, all existing FCA-granted exemptions expire on 5 July 2026. Firms currently operating under exemptions must reapply through each venue's new process. There is no automatic carryover.
ICE has established baseline limits illustrating venue-specific granularity. ICE WTI Crude Futures drop to 6,000 lots two days before expiry, then 5,000 lots on the final two trading days. Unlisted commodity derivatives carry a default 2,500 lot limit. Soft commodities have specific delivery limits from close of business before First Notice Day.
ICE will use accountability thresholds as “soft limits” to trigger monitoring and may require position reductions before formal limits are breached. The LME requires immediate notification of any breach, including intra-day violations. Positions across accounts under common ownership or control are aggregated unless firms demonstrate independent control.
ICE and LME position limit compliance: Monitoring, reporting, and aggregation rules
Firms trading across multiple UK venues will manage exchange-specific limits even for similar contracts. ICE WTI Crude Futures drop to 6,000 lots two days before expiry and 5,000 lots on the final two days. Unlisted contracts default to 2,500 lots. Soft commodities have delivery limits from close of business before First Notice Day. The LME applies its own methodology for metals like copper and aluminium.
ICE uses accountability thresholds as soft limits that can trigger intervention before formal breaches, requiring firms to monitor both. Aggregation rules compound this: positions under common ownership or control must be combined unless independent control is demonstrated.
Operationally, firms must manage multiple venue-specific limit regimes, accountability thresholds, reporting processes, and exchange enquiries. ICE’s revised reporting introduces identifiers distinguishing FCA- and CFTC-governed contracts. The LME requires real-time monitoring with immediate breach notification and no end-of-day reconciliation. Members must also ensure clients monitor and comply with LME limits.
The exemption regime creates further complexity. Firms must track both standard limits and approved exemption ceilings. As all FCA exemptions expire on 5 July 2026, firms must plan for transition risk.
How do UK position limits differ from EU MiFID II requirements?
While the FCA decentralizes position limit authority to venues, the EU maintains oversight through national regulators under MiFID II. For firms operating in both jurisdictions, this creates operational friction: different limit-setting authorities, different reporting processes and timelines, different accountability frameworks. The same trading behavior might be routine in one jurisdiction and require explanation in another.
The FCA also takes a different approach to OTC positions. The FCA requires venues to collect OTC position information where appropriate, rather than automatically treating all economically equivalent OTC positions as within the scope of mandatory limits. This gives venues discretion in determining which OTC positions count toward position limits, adding another layer of complexity for firms trading both exchange-traded and OTC instruments across jurisdictions.
Managing this divergence requires systems that can handle multiple regulatory frameworks simultaneously, understand which limits apply based on where and what firms are trading, and adjust monitoring and reporting accordingly.
When should firms prepare for UK Position limits transfer?
During the first and second quarters of 2026, trading venues will publish their position limit methodologies and accountability frameworks. That is when firms will see what ICE, the LME, and other venues have decided, and it is probably later than most would prefer for making major system changes.
For firms operating under FCA-granted exemptions, the timeline is tight. Firms need to understand each venue’s exemption criteria, prepare applications with supporting documentation, submit through venue-led processes, and receive approval before current exemptions lapse. Any gap could force firms to reduce positions or halt certain trading strategies.
If position monitoring relies on centralized FCA data, firms are looking at a fundamental architectural change, not a configuration update. For LME members, this includes testing incident response procedures and ensuring systems can detect and alert on intra-day limit violations in real time.
Multi-Venue position monitoring: Automated alerts and venue-specific rules
Legacy compliance systems were designed when regulators set uniform limits across markets. Effective position monitoring now requires real-time aggregation of positions across venues and accounts under common control, dynamic limit tracking that updates as venues change thresholds, automated alerts specific to each venue’s requirements, and flexible reporting that adapts to venue-specific formats and identifiers.
ICE’s tiered WTI Crude limits that drop as expiry approaches exemplify the date-specific complexity systems must handle. The LME’s immediate breach notification requirement makes end-of-day reconciliation obsolete. Firms need intra-day monitoring that detects the moment a position crosses a limit threshold and triggers the notification workflow instantly.
BroadPeak's Position Limits solution handles multi-jurisdictional complexity by connecting directly to exchange data feeds and applying venue-specific rules automatically.
As venues publish their frameworks, we integrate them into existing infrastructure without requiring system overhauls.
Managing multi-jurisdiction compliance: Infrastructure for UK-EU regulatory divergence
The transfer of position limit authority to venues is part of a broader pattern accelerating since Brexit. What started as regulatory divergence has evolved into fundamentally different regulatory philosophies between the UK and EU. For commodity traders, compliance is no longer just about following rules. It is about managing systems that can handle multiple, sometimes conflicting, regulatory frameworks.
The firms that navigate this successfully will not be those with the biggest compliance teams. They will be the ones with infrastructure flexible enough to adapt as regulations continue to diverge. The regulatory landscape will keep shifting, and the distance between UK and EU approaches will keep growing.
Real-time position limit tracking across global exchanges
Managing position limits is about more than just following rules, it requires a data-driven approach. BroadPeak automatically ingests and updates position limit data from global exchanges daily, capturing millions of live data points in near real time. This reduces manual inputs and outdated tables, ensuring clients work with accurate, current thresholds.
By structuring limits exactly as exchanges define them, including variations by product, expiry, contract type, and participant classification, BroadPeak aligns limits with exchange criteria for better risk management.
It also processes complex rules such as spot-month diminishing factors, parent-child product groupings, and delta-based aggregation of futures and options to calculate exposure in line with exchange standards. As regulatory frameworks and trading venues evolve, BroadPeak’s flexible architecture allows firms to add new coverage quickly, without costly system changes.
Find out more broadpeakpartners.com/solutions/position-limits/
