Position Limits Regulation - Comment Letter - Goldman Sachs - March 28, 2011

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Position Limits for Derivatives
March 28, 2011

Goldman Sachs offers their concerns about the Proposed Rules, stating that “the manner in which the Proposed Rules would apply limits to positions that are ‘concentrated’ when viewed in the unduly narrow context of belonging to a swap or futures ‘class,’ without giving effect to offsets across classes, will reduce liquidity for bonafide hedgers and will impair the price discovery process… Accordingly, it is our view that the costs and potentially disruptive effects of the Proposed Rules outweigh their potential benefits. If the Commission determines that it is necessary to impose position limits, we respectfully urge that it modify its approach by applying limits exclusively to spot month positions in contracts that may be physically-settled. To the extent that the Commission imposes limits on both futures and swaps, we recommend that it recognize offsets between such positions.”

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