The new UK commodity derivatives position limits regime is due to enter into force on 6 July 2026. In a departure from the design of the EU MiFID II position limits regime, the new UK regime shifts the responsibility for setting and overseeing position limits from the regulator to the exchanges. The new regime requires position limits to be placed on Critical contracts, 14 of which were identified by the FCA, including the UK NBP Natural Gas Futures contract.
In April 2026, ICE Futures Europe published a list of the final position limits it expected to apply from 6 July 2026 (click here), with the caveat that they remained subject to change prior to formal go live. For the UK NBP Natural Gas Futures ("M") contract, ICE assigned a "step down" Spot Month limit structure comprising:
A 25,000-lot limit applicable on the first trading day from when the contract became the front month expiry
A tightened limit of 10,000 lots in the last five trading days before expiry
An Other Months limit of 75,000 lots
A Spot Month Accountability Level of 5,000 lots
ICE also listed the UK NBP Natural Gas Options (Futures Style Margin) ("UKF") contract as a "Related" contract, meaning it aggregates with positions of the limit-holding Critical contract.
In its latest announcement this week (click here), ICE amended the above structure by removing the 10,000-lot step-down limit and replacing it with a Delivery Limit of 10,000 lots. A Delivery Limit sets a cap on the number of lots that can be taken to expiry in a physically delivered contract.
ICE did not provide a reason for the change, though it is likely based on market feedback from its initial proposal. The change will give market participants more flexibility to hold larger legitimate hedging positions closer to expiry, while still mitigating the risk of cornering or undue concentration in the deliverable supply by capping positions held into expiry.
ICE has published an updated version of the position limits expected to apply from 6 July 2026 (click here, note: this triggers an Excel download) reflecting the above amendment.
With implementation of the new regime only weeks away, firms should have already assessed their proximity to these limits, net of potential exemptions, and determined whether systematic monitoring is required or some other method of ensuring the firm remains below the limits.
Compliance should ensure that both Front Office and Operations are aware of this late change, and that internal systems and controls are updated accordingly.