Position Limits Regulation - Comment Letter - GFI Group - January 27, 2011

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RIN 3038-AD15 and 3038-AD16 Position Limits for Derivatives
January 27, 2011

Michael Cosgrove, Managing Director of GFI Group, Inc., submitted this letter to the CFTC on January 27, 2011. Mr. Cosgrove disputes the "conventional wisdon" that excessive speculation was to blame for the 2008 spike in commodity prices. He further suggests that, while position limits are "necessary for the smooth functioning of physically deliverable commodities", position limits on cash settled markets are "disruptive, dangerous, and of no positive value."

Cosgrove recommends withdrawal of the proposal with regard to cash-settled contracts, a tightening of the position limits for physically-delivered products, and a longer review period before a final rule is established.

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