Position Limits Regulation - Comment Letter - CME Group - March 28, 2011

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Position Limits for Derivatives
March 28, 2011

CME Group opposes the adoption of the Commission’s proposal arguing that “the Commission has not met its burden of showing that the proposed position limit regime is ‘necessary’ and ‘appropriate.’ The Commission, moreover, has failed to undertake a comprehensive cost-benefit analysis of its proposed rules, as required by statute. The Commission also ignores the wealth of empirical evidence supporting the view that the proposed hard position limits (and related aggregation policy and restrictive exemptions) would actually be counterproductive by decreasing liquidity in the CFTC-regulated markets which, in turn, would likely increase both price volatility and the cost of hedging especially in deferred months.”

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