Position Limits Regulation - Comment Letter - Gresham Investment Management - February 14, 2011

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RIN 3038-AD15 and 3038-AD16 Position Limits for Derivatives
February 14, 2011

Henry Jarecki, Chairman of Gresham Investment Management LLC, submitted this letter to the CFTC on February 14, 2011. Dr. Jarecki argues with the categorization of Gresham as a "speculator, in the same status as the unconstrained and highly leveraged futures traders for whom position limits were no doubt intended." He explains that the company's risk controls, client management, and unleveraged customer base should allow the firm relief from position limits, as they had been until 2009.

Jarecki further argues:

  • There is "no more than anecdotal evidence" that position limits would lower the prices of food, fiber, or mineral prices.
  • The "legacy limits" proposal creates an unnecessary implementation delay on limits where they are needed -- with leveraged speculators.
  • The bona fide hedger exemption creates an "unlevel playing field," as it relates to unleveraged entities such as Gresham and their providing of liquidity and price discovery to the market.


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