[Federal Register Volume 79, Number 128 (Thursday, July 3, 2014)]
[Proposed Rules]
[Pages 37973-37974]
From the Federal Register Online via the Government Publishing 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, [email protected]; or
Riva Spear Adriance, Senior Special Counsel, Division of Market
Oversight, (202) 418-5494, [email protected]; 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