Position Limits Regulation - Comment Letter - FIA - January 22, 2015

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Position Limits for Derivatives
January 17, 2012

From the comment letter:

"Consistent with its prior comments, FIA urges the Commission to exercise caution as it seeks to implement a complex position limits regime.5 Section 4a(a)(1) authorizes the Commission to set position limits if it finds that they are necessary to prevent “excessive” speculation. If the Commission makes such a finding, FIA recommends that the Commission only set spot month position limits and work with designated contract markets (“DCM”) to adopt and implement accountability levels outside of the spot month in lieu of hard limits.."

"FIA, like many other commenters, is concerned that the Commission’s definition of bona fide hedging positions is overly narrow and does not recognize long-standing commercial risk-management practices authorized by the statutory definition of bona fide hedging positions in Section 4a(c)(2) of the CEA. As FIA previously has commented, CEA Section 4a(c)(1) prohibits the Commission from establishing limits on bona fide hedging transactions or positions.14 The Commission should exercise great care to ensure that the Proposed Rules do not unduly restrict commercial risk management transactions and positions in Referenced Contracts."


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