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February 10, 2014
VIA ELECTRONIC SUBMISSION
Mr. David Stawick
Secretary
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, N.W.
Washington, DC 20581
CFTC Proposed Rule – Position Limits for Derivatives (RIN 3038-AD99
and 3038-AD16)(78 Fed. Reg. 75680)(December 12, 2013)(the “Position
Limits Proposal”) and Aggregation of Positions (RIN 3038-AD82) (78 Fed.
Reg.68946) (November 15, 2013) (the “Aggregation Proposal” and
collectively, the “Proposed Rules”)

Dear Mr. Stawick:
United States Commodity Funds, LLC (“USCF”) is pleased to have this opportunity to
comment on the above-referenced Proposed Rules. The Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”) requires the Commodity Futures Trading
Commission (the “CFTC”)to consider position limits for exchange-traded futures and options
contracts and swaps and swaption contracts that are economically equivalent to such futures and
options contracts. The CFTC issued the Proposed Rule, which proposes certain initial position
limits and a framework for establishing other limits to meet the Dodd-Frank Act’s requirements.
The mere fact that the Dodd-Frank Actrequires the CFTC to consider adopting position
limits does not mean that such limits should be imposed in an overly restrictive fashion or
without detailed analysis. Furthermore, regardless of the statutory mandate in the Dodd-Frank
Act, USCF believes that the CFTC cannot escape the question of whether it is wise or
appropriate to adopt rules that may inappropriately disrupt fair and openmarkets or that interfere
with the ability of main street investors to gain exposure to the commodity markets in a cost
effective and efficient manner by investing in commodity pools, as discussed below, until after
the CFTC has presented a reasoned analysis demonstrating that such actions will actually be
beneficial to the markets. As USCF has noted in previous comment letters filed with the CFTC,as a general matter USCF strongly urges the CFTC to exercise caution in implementing position
limits so as not to create volatility or diminish liquidity in the market. USCF specifically
United States Commodity Funds LLC
1999 Harrison Street Suite 1530
Oakland CA 94612
Phone: 510.522.9600 | Fax: 510.522.9604

Mr. David Stawick
Secretary
Commodity Futures Trading Commission
believesthat instead of preventing speculation or manipulation in the marketplace, position
limits will hamper the ability of USCF and other managers of publicly traded, unlevered, passive
commodity funds to prudently meet the investment objectives of the commodity pools that they
manage. The value of the exchange-traded pools managed by USCF to the hundreds of
thousands of investors in such pools, andthe several million investors in all similar pools
currently in operation in the United States, could be adversely affected by the Proposed Rule.
Further, in order to prevent regulatory arbitrage, USCF believes that CFTC should
continue to coordinate with foreign regulators regarding the form,timing and implementation of
position limits. The Dodd-Frank Act requires the CFTC to consult withdesignated contract
markets to study the effect of position limits on excessive speculation and migration to trading
venues abroad. USCF believes that any analysis of such effects and potential migration outside
of the U.S. markets is a crucial first step that the CFTC must take before it can effectively set
position limits.
We believe that there are four major areas of concern that we have as aparticipant in the
commodity markets that are raised by the CFTC’s Proposed Rules and the method through which
the CFTC reached its current status on this topic.
First, we are disheartened that the CFTC failed to use the opportunity and the time
provided by the US District Court for the District of Columbia’s (the “District Court”) rejection
of the initial position limit rule to conduct...