CME SER#8299 - a bit of welcome news for firms using energy futures

On March 28, the CME issued SER #8299 - the report is here. This report sets forth proposals (still subject to CFTC review) that would modify its Rule 855 that allows offsetting of certain energy spread trades against open positions in the underlying individual contracts. The rule previously set forth a limited number of energy contracts covered by this provision, there is now an expanded number of contracts eligible for these offsets. The contracts are listed in a table attached to the report and are primarily directed towards allowing mini and micro contracts to be offset against the standard futures contract for the same product - though in some instances, the offset is between the standard future and a look-alike future.
More importantly, the NYMEX rule used to read "offset and liquidate". The new rules has removed "and liquidate" from the proposed wording. This would expand the allowable structures for carrying offsetting long and short positions without immediate liquidation, something firms may find advantageous. The other positive impact is that the offset allows a reduction in capital requirements associated with the open positions.
The report indicates the revised Rule 855 is to go into effect on April 15, 2019, subject to any CFTC review periods.