Comment Text:
10-005
COMMENT
CL-00571
From:
Sent:
To:
Subject:
Mikenlori9@aol. com
Thursday, April 15, 2010 2:31 PM
Metals Hearing
Proposed Federal Speculative Position
Dear Secretary Stawick:
Thank you for the opportunity to offer my comments on your recent hearings
concerning position limits for precious metals. I am a retired partner of one of the
big 4 accounting firms. During my active career I had the opportunity to
observe several of my natural resource clients participate in legitimate hedging
programs. For several years, I have questioned the need for a bank to hedge at all,
let alone hedge in such a way that they are a major controlling factor in a market. I
urge the Commission to establish and enforce trading limits and to seriously
consider prohibiting banks from hedging at all. The limits for precious metals
should be established in such a way that they are consistent with the limits for
other commodities. For example, holding contracts representing more than 1% of
the market might be considered controlling.
It is my understanding that other commodities have position limits in place and
that the purpose of such limits is to allow for the free flow of the markets and to
assure that manipulation does not take place. I see no reason why limits applied to
some commodities should not be applied to all. Otherwise, those who hedge as a
legitimate business strategy are not afforded the opportunity of a free and fair
market.
Sincerely yours,
Michael D. Hendrickson
