Position Limits Regulation - Comment Letter - Morgan Stanley - March 28, 2011

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Position Limits for Derivatives
March 28, 2011

In their comment letter, Morgan Stanley suggests the Commission should:

  • defer consideration of position limits until after it has sufficient data about the size of the relevant markets and the positions held by market participants
  • define bona fide hedging transactions and positions more broadly to include long-standing and important risk management transactions, and retain a mechanism by which hedgers can obtain exemptions for non-enumerated hedging transactions
  • exercise its exemptive authority to establish a process by which liquidity providers can obtain exemptions from speculative position limits;
  • eliminate the limitation on holding a speculative position in a spot-month physical-delivery contract while holding a proposed conditional position in a spot-month cash-settled contract of up to five times the speculative limit
  • not condition, curtail or eliminate the availability of longstanding exemptions from the aggregation requirements based on the lack of control over trading.

References

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