Comment Text:
Dear Mr. Stawick
Kathy MCNeely
P.O. Box 29132
Washington DC 20017
2007 and 2008 are not years I would want to relive if I were a farmer. Price fluctuations were so volatile that it was impossible for farmers to know that the investments made in planting would be recouped by the end of the season, and in the developing world people couldn't afford to buy even the staple crops they count on.
After years of highly volatile commodity markets, the CFTC has an important opportunity to bring order back to these important markets by limiting excessive speculation. I suggest five important points to consider while developing the rules to implement the Dodd-Frank financial reform law.
1- Limit the definition of “commercial risk”: it is important to adhere to the spirit of the Dodd-Frank bill and limit this definition to bona fide users of commodity markets who deal with physical commodities. Commercial risk should not be expanded to include financial risks for banks and hedge funds.
2- Position Limits: the CFTC must define an strict approach to setting position limits that will address excessive speculation.
3- Exchange Traded Notes and Funds and swap-based Index Funds: these instruments influence commodity markets and I ask the Commission to define more aggressive limits for these types of speculative instruments.
4- Ownership of trading facilities: five large banks currently control 96 percent of derivatives activity. It is important to prevent these or any other class of business from collectively owning majority stakes in clearinghouses and other trading facilities. The CFTC must establish both a meaningful limit on individual ownership and a limit on collective ownership if the proposed rule is to have the intended effect of limiting conflicts of interest, assuring transparency and open competition, and preventing clearinghouses and exchanges from catering solely to the interests of a few large participants in the financial community.
5- High frequency trading: Computerized/algorithm-based trading, including high-frequency trading appears to have a growing effect on commodity markets, so I support the Commission carrying out in-depth studies of their effects, and considering the appropriateness of these types of investments in important commodity markets at all.
Kathleen McNeely
PO Box 29132
Washington, DC 20712
