Comment Text:
Dear Chairman Gensler and fellow Commissioners:
I urge you to approve the staff’s proposal on position limits, including limiting exemptions to bona fide hedgers.
Naturally SRO’s such as the CME have a vested interest in resisting the imposition of position limits and have along with their members been visibly employing their vast resources by lobbying hard against the CFTC obtaining the necessary powers and transparency they will require to implement this most important pivotal component of the Dodd Frank act as passed by congress. Position limits under this act seek to avoid the imbalances and concentration that have under these same SRO’s watch been the root cause of recent market disruptions.
It has also not escaped the public’s notice that the SRO’s and their large clients have been busy tying up CTFC staff members since the passing of the act with daily lobby meetings whilst simultaneously voting against the CTFC obtaining the necessary staffing levels they will require to regulate and monitor position limits. This is an unacceptable tactic, changes nothing and continues to risk the integrity of the markets.
I would draw your attention to the proposed formula in silver. The current formula would result in a position limit of over 5,000 contracts for any single speculator, on an all-months-combined basis. 5,000 contracts is the equivalent of 25 million ounces of silver. This is too high of a threshold in light of the realities of the world silver market.
There are only three mining companies in the world who produce more than 25 million ounces of silver per year and only a similar number of industrial consumers using more than that amount. Any speculator holding an amount of silver derivatives greater than what 99% of the world’s silver producers and consumers make or use in a year would have inordinate pricing power. The purpose of speculative position limits is to prevent such a circumstance.
Please institute a 1500 contract (7.5 million ounce) position limit for silver
Andrew Maguire
