Comment Text:
As a Guaranteed IB small business owner, who has been a Registered Series 3 broker in the futures markets since 1995, please consider--before making a final decision on increasing margins to the full amount--whether this decision helps or hurts small businesses and small farms.
I have heard often since the Financial Crisis about the Middle Class and protecting it; or I have heard how we need to get away from "too big to fail" in the financial sector. And I agree with both of these concepts. But do the proposed changes in this rule do either of these? Actually, I believe they could possibly do neither, and actually work to hurt small businesses and increase "too big to fail". I am suggesting this because I think that full margins would likely cause an increase in the number of large firms in proportion to and at the expense of smaller firms: thereby allowing these large firms to gain a competitive advantage so that they have a potential for moral hazard and becoming "too big to fail". And I believe the same could be said for smaller farmer-operators whose capacity to take-on additional margin exposure would prevent them from utilizing risk-management vehicles that the futures industry offers; instead, the larger operators would have a competitive advantage and once again the potential for greater concentration could prevail...creating the same moral hazard potential. In my view, financial markets operate best when the playing-field is even and risk management is available to all who seek it.
I admire the "spirit of the law" and the intent of the rule change being discussed; but I ask that the CFTC not allow the actual implementation of this rule to go directly against and be contrary to the intent set forth when the rule was established.
Thank you for your time and the opportunity to comment on this subject.
Sincerely,
Michael Zuzolo, President
Global Commodity Analytics & Consulting LLC
globalanalytics.biz
