Position Limits Regulation - Comment Letter - Kansas City Board of Trade - March 28, 2011

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Position Limits for Derivatives
March 28, 2011

From the comment letter:

"Given the tremendous growth in both volume and open interest in all three wheat markets in recent years, we support and encourage the Commission to adopt equal and reasonable legacy (specific numeric) position limits for the enumerated wheat contracts that will continue to serve the needs of our markets and promote expanded market use. The creation of disparate limits between these markets will only serve to impede rather than foster such growth. In addition, unreasonably restrictive limits will only serve to aide overseas markets in promoting their contracts as replacements for the U.S. wheat futures global benchmark contracts, similar to the movement of late to shift away from the U.S. dollar as the global currency." In regards to spot month position limits, KCBT takes "exception to a spot month formula based solely on deliverable supply, which will result in disparate limits across wheat markets and diminish liquidity through inter-market spreading during the spot month."

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