Position Limits Regulation - Comment Letter - Minneapolis Grain Exchange - December 2, 2010

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Timeline, Position Reports for Physical Commodity Swaps
Final Rule Effective Date No-action Relief Deadline
July 22, 2011 September 20, 2011 June 30, 2013

Position Reports for Physical Commodity Swaps
December 2, 2010

In the comment letter, MGEX shares five concerns regarding physical position reports for its hard red spring wheat (HRSW) contracts:

  • "Disruption in pricing and activity in the HRSW contract could well occur should futures position limits among the wheat contracts vary."
  • The commission is "acting before adequate information is known about the activity and volume of swaps."
  • "Setting position limits aggregately across DCMs is begging for potential discrimination."
  • Regarding the process for “pairing” a swap with a futures contract, "more clarity is necessary."
  • A final concern is "the unknown financial risk and business risk the proposed rulemaking presents."

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