[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Proposed Rules]
[Pages 30762-30763]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12427]


=======================================================================
-----------------------------------------------------------------------

COMMODITY FUTURES TRADING COMMISSION

17 CFR Parts 1, 15, 17, 19, 32, 37, 38, 140, and 150

RIN 3038-AD99; 3038-AD82


Position Limits for Derivatives and Aggregation of Positions

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed rulemaking; reopening of comment periods.

-----------------------------------------------------------------------

SUMMARY: On December 12, 2013, the Commodity Futures Trading Commission 
(``Commission'') published in the Federal Register a notice of proposed 
rulemaking (the ``Position Limits Proposal'') to establish speculative 
position limits for 28 exempt and agricultural commodity futures and 
options contracts and the physical commodity swaps that are 
economically equivalent to such contracts. On November 15, 2013, the 
Commission published in the Federal Register a notice of proposed 
rulemaking (the ``Aggregation Proposal'') to amend existing regulations 
setting out the Commission's policy for aggregation under its position 
limits regime. The Commission has directed staff to hold a public 
roundtable on June 19, 2014, to consider certain issues regarding 
position limits for physical commodity derivatives. In order to provide 
interested parties with an opportunity to comment on the issues to be 
discussed at the roundtable, the Commission will reopen the comment 
periods for the Position Limits Proposal and the Aggregation Proposal 
for a three-week period starting June 12, 2014 (one week before the 
roundtable) and ending July 3, 2014 (two weeks following the 
roundtable).
    Comments should be limited to the issues of hedges of a physical 
commodity by a commercial enterprise, including gross hedging, cross-
commodity hedging, anticipatory hedging, and the process for obtaining 
a non-enumerated exemption; the setting of spot month limits in 
physical-delivery and cash-settled contracts and a conditional spot-
month limit exemption; the setting of non-spot limits for wheat 
contracts; the aggregation exemption for certain ownership interests of 
greater than 50 percent in an owned entity; and aggregation based on 
substantially identical trading strategies.

DATES: The comment periods for the Aggregation Proposal published 
November 15, 2013, at 78 FR 68946, and for the Position Limits Proposal 
published December 12, 2013, at 78 FR 75680, will reopen on June 12, 
2014, and close on July 3, 2014.

ADDRESSES: You may submit comments, identified by RIN 3038-AD99 for the 
Position Limits Proposal or RIN 3038-AD82 for the Aggregation Proposal, 
by any of the following methods:
     Agency Web site: http://comments.cftc.gov;
     Mail: Secretary of the Commission, Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street NW., 
Washington, DC 20581;
     Hand delivery/courier: Same as mail, above; or
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow instructions for submitting comments.
    Please submit your comments using only one method. All comments 
must be submitted in English, or if not, accompanied by an English 
translation. Comments will be posted as received to http://www.cftc.gov. You should submit only information that you wish to make 
available publicly. If you wish the Commission to consider information 
that may be exempt from disclosure under the Freedom of Information 
Act, a petition for confidential treatment of the exempt information 
may be submitted under Sec.  145.9 of the Commission's regulations (17 
CFR 145.9).
    The Commission reserves the right, but shall have no obligation, to 
review, pre-screen, filter, redact, refuse or remove any or all of your 
submission from http://www.cftc.gov that it may deem to be 
inappropriate for publication, such as obscene language. All 
submissions that have been redacted or removed that contain comments on 
the merits of the rulemaking will be retained in the public comment 
file and will be considered as required under the Administrative 
Procedure Act and other applicable laws, and may be accessible under 
the Freedom of Information Act.

FOR FURTHER INFORMATION CONTACT: Stephen Sherrod, Senior Economist, 
Division of Market Oversight, (202) 418-5452, ssherrod@cftc.gov; or 
Riva Spear Adriance, Senior Special Counsel, Division of Market 
Oversight, (202) 418-5494, radriance@cftc.gov; Commodity Futures 
Trading Commission, Three Lafayette Centre, 1155 21st Street NW., 
Washington, DC 20581.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Commission has long established and enforced speculative 
position limits for futures and options contracts on various 
agricultural commodities as authorized by the Commodity Exchange Act 
(``CEA'').\1\ The part 150 position limits regime \2\ generally 
includes three components: (1) the level of the limits, which set a 
threshold that restricts the number of speculative positions that a 
person may hold in the spot-month, individual month, and all months 
combined,\3\ (2) exemptions for positions that constitute bona fide 
hedging transactions and certain other types of transactions,\4\ and 
(3) rules to determine which accounts and positions a person must 
aggregate for the purpose of determining compliance with the position 
limit levels.\5\ The Position Limits Proposal generally sets out 
proposed changes to the first and second component of the position 
limits regime and would establish speculative

[[Page 30763]]

position limits for 28 exempt and agricultural commodity futures and 
option contracts, and physical commodity swaps that are ``economically 
equivalent'' to such contracts (as such term is used in CEA section 
4a(a)(5)).\6\ The Aggregation Proposal generally sets out proposed 
changes to the third component of the position limits regime.\7\
---------------------------------------------------------------------------

    \1\ 7 U.S.C. 1 et seq.
    \2\ See 17 CFR part 150. Part 150 of the Commission's 
regulations establishes federal position limits on futures and 
option contracts in nine enumerated agricultural commodities.
    \3\ See 17 CFR 150.2.
    \4\ See 17 CFR 150.3.
    \5\ See 17 CFR 150.4.
    \6\ See Position Limits for Derivatives, 78 FR 75680 (Dec. 12, 
2013).
    \7\ See Aggregation of Positions, 78 FR 68946 (Nov. 15, 2013).
---------------------------------------------------------------------------

    In order to provide interested parties with an opportunity to 
comment on the Aggregation Proposal during the comment period on the 
Position Limits Proposal, the Commission extended the comment period 
for the Aggregation Proposal to February 10, 2014, the same end date as 
the comment period for the Position Limits Proposal.\8\
---------------------------------------------------------------------------

    \8\ See 79 FR 2394 (Jan. 14, 2014).
---------------------------------------------------------------------------

    Comment letters received on the Position Limits Proposal are 
available at http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1436. Comment letters received on the Aggregation 
Proposal are available at http://comments.cftc.gov/PublicComments/CommentList.aspx?id=1427.

II. Reopening of Comment Period

    Subsequent to publication of the Position Limits Proposal and the 
Aggregation Proposal, the Commission directed staff to schedule a June 
19, 2014, public roundtable to consider certain issues regarding 
position limits for physical commodity derivatives. The roundtable will 
focus on hedges of a physical commodity by a commercial enterprise, 
including gross hedging, cross-commodity hedging, anticipatory hedging, 
and the process for obtaining a non-enumerated exemption. Discussion 
will include the setting of spot month limits in physical-delivery and 
cash-settled contracts and a conditional spot-month limit exemption. 
Further, the roundtable will include discussion of: the aggregation 
exemption for certain ownership interests of greater than 50 percent in 
an owned entity; and aggregation based on substantially identical 
trading strategies. As well, the Commission invites comment on whether 
to provide parity for wheat contracts in non-spot month limits.
    In light of the roundtable, the Commission is reopening the comment 
periods for the Position Limit Proposal and the Aggregation Proposal. 
Thus, both comment periods will reopen on June 12, 2014, and end on 
July 3, 2014.

    Issued in Washington, DC, on May 22, 2014, by the Commission.
Christopher J. Kirkpatrick,
Deputy Secretary of the Commission.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Appendix to Position Limits for Derivatives and Aggregation of 
Positions Reopening of Comment Periods--Commission Voting Summary

    On this matter, Acting Chairman Wetjen and Commissioner O'Malia 
voted in the affirmative. No Commissioner voted in the negative.

[FR Doc. 2014-12427 Filed 5-28-14; 8:45 am]
BILLING CODE 6351-01-P