[Federal Register Volume 80, Number 2 (Monday, January 5, 2015)]
[Proposed Rules]
[Pages 200-201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30831]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 80, No. 2 / Monday, January 5, 2015 /
Proposed Rules
[[Page 200]]
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. On December 9, 2014, the Commission's Agricultural
Advisory Committee held a public meeting that considered, among other
matters, deliverable supply and exemptions for bona fide hedging
positions. In conjunction with the meeting of the Commission's
Agricultural Advisory Committee, the Commission posted questions and
presentation materials on the Commission's Web site; additionally,
access to a video webcast of the meeting has been added to the Web
site. To provide commenters with a sufficient period of time to respond
to questions raised and points made at the Agricultural Advisory
Committee meeting, the Commission reopened the comment periods for an
additional 45 days, from December 9, 2014 to January 22, 2015. The
Commission is providing notice and clarification that, in addition to
commenting on the agenda issues noted in the December 4, 2014, Federal
Register release providing notice of the re-opened comment period,
comments may be made on the issues addressed at the meeting or in the
associated materials posted to the Commission's Web site, as they
pertain to agricultural commodities.
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, reopened on December 9,
2014, and will close on January 22, 2015.
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: Christopher Kirkpatrick, 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 components 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\
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
[[Page 201]]
The Commission published the Position Limits Proposal and the
Aggregation Proposal separately because it believes that the proposed
amendments regarding aggregation of positions could be appropriate
regardless of whether the Position Limits Proposal is finalized.\8\ If
the Aggregation Proposal is finalized first, the modifications would
apply to the current position limits regime for futures and option
contracts on nine enumerated agricultural commodities. If the Position
Limits Proposal is subsequently finalized, the modifications in the
Aggregation Proposal would apply to the position limits regime for 28
exempt and agricultural commodity futures and options contracts and the
physical commodity swaps that are economically equivalent to such
contracts.
---------------------------------------------------------------------------
\8\ See id. at 68947.
---------------------------------------------------------------------------
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.\9\
---------------------------------------------------------------------------
\9\ See 79 FR 2394 (Jan. 14, 2014).
---------------------------------------------------------------------------
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
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
published a document in the Federal Register on May 29, 2014, reopening
the comment periods for the Position Limit Proposal and the Aggregation
Proposal for three weeks, from June 12, 2014 to July 3, 2014. The
Commission published notice in the Federal Register on July 3, 2014,
further extending the comment periods to August 4, 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
The Commission's Agricultural Advisory Committee met on December 9,
2014. The agenda adopted for the meeting included consideration, among
other matters, of two issues associated with the Position Limits
rulemaking: Deliverable supply and exemptions for bona fide hedging
positions. In conjunction with the meeting of the Commission's
Agricultural Advisory Committee, the Commission posted questions and
presentation materials on the Commission's Web site; additionally,
access to a video webcast of the meeting has been added to the Web
site.\10\ To provide interested persons with a sufficient period of
time to respond to questions raised and points made at the Agricultural
Advisory Committee meeting, the Commission reopened both the Position
Limit Proposal and the Aggregation Proposal for an additional 45-day
comment period.\11\ The Commission is providing notice and
clarification that, in addition to commenting on the agenda issues
noted in the December 4, 2014, Federal Register release providing
notice of the reopened comment period, comments may be made on the
issues addressed at the meeting or in associated materials posted to
the Commission's Web site, as they pertain to agricultural commodities,
including hedges of a physical commodity by a commercial enterprise;
and the process for estimating deliverable supplies used in the setting
of spot month limits, as each pertains to agricultural commodities.
---------------------------------------------------------------------------
\10\ Questions, presentation materials, and a video webcast have
been made available at http://www.cftc.gov/PressRoom/Events/opaevent_aac120914.
\11\ See 79 FR 71973 (Dec. 4, 2014).
---------------------------------------------------------------------------
Both comment periods reopened on December 9, 2014, and will close
on January 22, 2015.
Issued in Washington, DC, on December 30, 2014, by the
Commission.
Christopher J. Kirkpatrick,
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, Chairman Massad and Commissioners Wetjen, Bowen,
and Giancarlo voted in the affirmative. No Commissioner voted in the
negative.
[FR Doc. 2014-30831 Filed 1-2-15; 8:45 am]
BILLING CODE 6351-01-P