[Federal Register Volume 79, Number 128 (Thursday, July 3, 2014)]
[Proposed Rules]
[Pages 37973-37974]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-15618]


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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; extension of comment periods.

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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. In addition, the Commission 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 published 
notice in the Federal Register on May 29, 2014, that the comment 
periods for the Position Limits Proposal and the Aggregation Proposal 
were reopened, starting June 12, 2014 (one week before the roundtable) 
and ending July 3, 2014 (two weeks following the roundtable). To 
provide commenters with a sufficient period of time to respond to 
questions raised and points made at the roundtable, the Commission is 
now further extending the comment period. 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 close on August 4, 
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 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\
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    \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).
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    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

[[Page 37974]]

end date as the comment period for the Position Limits Proposal.\8\
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    \8\ See 79 FR 2394 (Jan. 14, 2014).
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    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. Extension of Comment Period

    Subsequent to publication of the Position Limits Proposal and the 
Aggregation Proposal, Commission directed staff to schedule a June 19, 
2014, public roundtable to consider certain issues regarding position 
limits for physical commodity derivatives. The roundtable focused 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 included 
the setting of spot month limits in physical-delivery and cash-settled 
contracts and a conditional spot-month limit exemption. Further, the 
roundtable included 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 invited comment on whether to 
provide parity for wheat contracts in non-spot month limits. In 
conjunction with the roundtable, staff questions regarding these topics 
were posted on the Commission's Web site.
    To provide commenters with a sufficient period of time to respond 
to questions raised and points made at the roundtable, the Commission 
is further extending the comment periods for the Position Limit 
Proposal and the Aggregation Proposal. Thus, both comment periods will 
end on August 4, 2014.

    Issued in Washington, DC, on June 27, 2014, by the Commission.
Christopher J. Kirkpatrick,
Acting 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 Extension of Comment Periods--Commission Voting Summary

    On this matter, Chairman Massad and Commissioners O'Malia, Wetjen, 
and Giancarlo voted in the affirmative. No Commissioner voted in the 
negative. Commissioner Bowen did not participate in this matter.

[FR Doc. 2014-15618 Filed 7-2-14; 8:45 am]
BILLING CODE 6351-01-P