FCStone· 

Group 

1251 NW BriarclifiParkway 

Suite 800 

Kansas City MO 64116 

USA 

Tel: 816-410-7120 

Toll Free: 800-255-6381 

www.intlassets.com I www.fcstone.com 

December 14, 2009 

Mr. David A. Stawick 

Secretary 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21 51 Street N.W. 

Washington, D.C. 20581 

C.F.T.O. 

0 OF THE SECRETARIAT 

2009 DEC 15 Arl 9 53 

COMMENT 

Re: Kansas City Board of Trade Exemption Requests and Request for Relief 

Pursuant to Section 4(c) of the Commodity Exchange Act -74 Fed. Reg. 58608 

(November 13, 2008) 

Dear Mr. Stawick: 

International Assets Holding Company appreciates the opportunity to provide 

comment on the Commodity futures Trading Commission's ("CFTC or Commission") 

Federal Register Release dated November 13, 2009 ("the Release"). Kansas City Board 

of Trade ("KCBT") is proposing to offer clearing services for agricultural swaps that will 

be executed off~exchange and cash settled. 

International Assets Holding Company is a for-profit corporation organized 

under the laws of the State of Delaware. One of International Assets Holding 

Company's chief operating subsidiaries is FCStone LLC. FCStone LLC is a registered 

Futures Commission Merchant. International Assets Holding Company and its 

subsidiaries provide commodity risk management consulting and transaction execution 

services to commercial commodity intermediaries, end-users and producers. 

International Assets Holding Company and its subsidiaries assist primarily middlemarket customers in optimizing their profit margins and mitigating exposure to 

commodity price risk. 

International Assets Holding Company strongly supports the KCBT's request to 

permit the clearing of Wheat Calendar Swap Transactions for the following reasons: 

Mitigating Counter~Party Default Risk: 

By allowing the Kansas City Board of Trade Clearing Corporation ("KCBTCC") to 

clear Wheat Calendar Swap Transactions, counter-party credit risk would be mitigated 

as the KCBTCC, a registered derivatives clearing organization in good standing and in 

compliance with Part 39 of the Commission's rules and regulations, would provide to the 

counter-party of these swap transactions a guarantee to make whole. 

The KCBTCC has proven its ability to manage risk by securing proper funding to 

protect itself if a default situation were to arise and has demonstrated with its past 
Mr. David A. Stawick 

December 14, 2009 

Page 2 

successful risk management techniques and procedures to ensure intermediaries have 

the financial wherewithal to clear these transactions. 

Settlement Pricing and Margining Methodology: 

As the KCBTCC purports in its petition, settlement prices for these swap 

transactions will be based on the settlement of the respective futures contract. These 

settlement procedures provide for standardization of these products adding credibility 

and security to these instruments thereby opening these markets to other users who 

may have been reluctant in the past as settlement was not standardized. Standardizing 

margining applications to these products will provide for a more level playing field in 

OTC markets, offering guidance on margining these types of positions. 

Alternative for Delivery: 

If approved, this tailored standardized wheat calendar swaps will allow for 

extension and tailoring of a viable, liquid contract to producers and consumers outside of 

the primary growing and delivery region based upon a widely-known standardized 

pricing mechanism. As such, this provides producers and consumers more alternatives, 

greater flexibility and more competition for choosing how best to manage their risk. 

Performance Relief: 

Traditional short hedgers are currently in great need of margin relief. For a short 

hedger to manage his risk in these markets, his costs to maintain positions in this market 

is costly and in some instances unavailable. These products may mitigate some of the 

financing issues faced by the producer. As noted in the KCBTCC's request, the clearing 

house may determine to apply inter-market spread credits for accounts with identical 

ownership that hold such spread positions. Effectively this spread credit could provide 

much needed margining relief and still encourage growth and product development in 

these areas. 

For reasons stated above, International Assets Holding Corporation and its 

subsidiaries believe the Commission should grant the Orders requested in the KCBTCC 

Petition and such orders are consistent with Congress' intent that the Commission use 

its exemption power under 4(c) of the Commodity Exchange Act to provide, "certainty 

and stability to existing and emerging markets so that financial innovation and market 

development can proceed in an effective and competitive manner''. 1 

Sincerely, 

Paul G. Anderson 

President 

1 HOUSE CONF. REPORT NO. 102-978, 1992 U.S.C.C.A.N. 3179, 3213 ("4(c) Conf. Report").