FR Doc E8-12723[Federal Register: June 6, 2008 (Volume 73, Number 110)]
[Proposed Rules]
[Page 32261-32262]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jn08-22]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 150
RIN 3038-AC40
Risk Management Exemption From Federal Speculative Position
Limits
AGENCY: Commodity Futures Trading Commission.
ACTION: Proposed rules; withdrawal.
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SUMMARY: On November 27, 2007, the Commodity Futures Trading Commission
(Commission or CFTC) published proposed rules to create a ``risk
management exemption'' from Federal speculative position limits--the
limits on the size of speculative positions that traders may hold or
control in futures and futures equivalent option contracts on certain
designated agricultural commodities. The Commission has determined to
withdraw these proposed rules.
FOR FURTHER INFORMATION CONTACT: Donald Heitman, Senior Special
Counsel, Division of Market Oversight, Commodity Futures Trading
Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington,
DC 20581, telephone (202) 418-5041, facsimile number (202) 418-5507,
electronic mail [email protected]; or John Fenton, Director of
Surveillance, Division of Market Oversight, telephone (202) 418-5298,
facsimile number (202) 418-5507, electronic mail [email protected].
SUPPLEMENTARY INFORMATION: Commission regulation 150.2 imposes limits
on the size of speculative positions that traders may hold or control
in futures and futures equivalent option contracts on certain
designated agricultural commodities named therein. Commission
regulation 150.3 lists certain types of positions that may be exempted
from these Federal speculative position limits.
On November 27, 2007, the Commission published proposed amendments
that would provide an additional exemption from Federal speculative
position limits for ``risk management positions'' (proposed
rulemaking).\1\ The proposal defined a risk management position as a
futures or futures equivalent position, held as part of a broadly
diversified portfolio of long-only or short-only futures or futures
equivalent positions, that is based upon either: (1) A fiduciary
obligation to match or track the results of a broadly diversified index
that includes the same commodity markets in fundamentally the same
proportions as the futures or futures equivalent position; or (2) a
portfolio diversification plan that has, among other substantial asset
classes, an exposure to a broadly diversified index that includes the
same commodity markets in fundamentally the same proportions as the
futures or futures equivalent position. The exemption, as proposed,
would have been subject to certain conditions, including that the
positions be passively managed, unleveraged, and not carried into the
spot month.
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\1\ Risk Management Exemption from Federal Speculative Position
Limits, 72 FR 66097 (November 27, 2007).
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The Commission requested public comment by January 28, 2008. The
Commission received a total of 10 comment letters in response to its
[[Page 32262]]
Federal Register publication.\2\ Three letters generally favored the
proposed regulations and seven letters were generally opposed to their
adoption. An Agricultural Forum held by the Commission on April 22,
2008 served as an additional venue for the presentation of views with
respect to the proposed rulemaking and a related Commission proposal to
revise the Federal speculative position limits delineated in Commission
regulation 150.2.\3\
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\2\ Federal Register Comment File 07-015, available at http://
www.cftc.gov/lawandregulation/federalregister/
federalregistercomments/2007/07-015.html.
\3\ Revision of Federal Speculative Position Limits, 72 FR 65483
(November 21, 2007) (to be withdrawn).
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Collectively, the comments received in response to the proposed
rulemaking and at the Commission's April 22 Agricultural Forum
reflected differing perspectives on a wide range of issues of
substantive import to the proposed rulemaking. The issues covered by
the commenters, both in favor and opposed to the Commission's proposal
to adopt a risk management exemption from the Federal speculative
position limits, included product margin requirements, the convergence
of cash and futures transaction prices, the impact of commodity-linked
instruments traded on national securities exchanges on CFTC regulated
transactions, the degree of transparency for market participation, and
the quantification of the impact of speculative trading on market
volatility. In light of the wide range of divergent positions that have
been put forth by interested parties, the current market conditions for
the contracts that would be affected by the proposed rulemaking, and in
order to determine whether further consensus among the affected parties
should be sought, the Commission has determined to withdraw the
proposed rulemaking pending further consideration of the relevant
issues.
Issued by the Commission June 2, 2008, in Washington, DC.
David Stawick,
Secretary of the Commission.
[FR Doc. E8-12723 Filed 6-5-08; 8:45 am]
BILLING CODE 6351-01-P
Last Updated: June 6, 2008