Comment Text:
It's good that the Commission is trying to put the Dodd-Frank Act into operation extensively, particularly those reforms focused on keeping excessive speculation in food and energy commodities under control.
Many studies by members of the University of London, UNCTAD, the FAO, the US Senate, Citigroup and the Petersen Institute, as well as Princeton, MIT and Yale have shown that excessive speculation is partially responsible for today's highly volatile commodity prices. Volatile prices which have hit very poor people in developing countries, among many others, very hard indeed.
So I urge the Commission to implement the proposed rules regarding aggregate speculative position limits to prevent excessive speculation. At this time of fragile economic recovery, we cannot allow speculators to unduly affect our food and energy prices.
Congress called for exemptions from these limits for bona fide hedgers. I ask that the Commission define the term 'bona fide hedgers' in the strictest sense possible, limiting exemptions to businesses that deal in physical commodities and use markets to hedge commercial risk in those commodities. Banks, hedge funds, private equity and all passive investors in commodities should not be deemed as bona fide hedgers. Institutions hedging price directional bets such as commodity index swaps, Exchange Traded Funds and Exchange Traded Notes also should not be considered as bona fide hedgers.
