I dissent from today’s position limits proposal (“Proposal”). The Proposal would create an uncertain and unwieldy process with the Commission demoted from head coach over the hedge exemption process to Monday-morning quarterback for exchange determinations. The Proposal would abruptly increase position limits in many physical delivery agricultural, metals, and energy commodities, in some instances to multiples of their current levels. It would provide no opportunity for the Commission to monitor the effect of these increases, or to act if necessary to preserve market integrity. The Proposal provides inadequate explanation for other key approaches in the document, including the use of position accountability rather than numerical limits for energy and metals commodities in non-spot months. The Proposal also ignores Congress’s mandate in the Dodd-Frank Act, and reverses decades of legal interpretations of the Commodity Exchange Act (“CEA”) by the Commission and the courts regarding the Commission’s authority and responsibility to impose position limits. It would require, for the first time, the Commission to find that position limits are necessary for each commodity prior to imposing limits.
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