2015-03834
Federal Register, Volume 80 Issue 37 (Wednesday, February 25, 2015)
[Federal Register Volume 80, Number 37 (Wednesday, February 25, 2015)]
[Proposed Rules]
[Pages 10022-10026]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-03834]
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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; provision of Table 11a; and
reopening 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. The Commission's Energy and Environmental Markets
Advisory Committee has scheduled a public meeting to be held on
February 26, 2015, which will consider, among other matters, exemptions
for bona fide hedging positions. In conjunction with the meeting of the
Commission's Energy and Environmental Markets Advisory Committee, the
Commission will post an agenda and associated materials, if any, on the
Commission's Web site; additionally, access to a video webcast of the
meeting will be added to the Web site. In addition, and in connection
with the meeting, the Commission is providing counts of the unique
persons over percentages of the 28 proposed position limit levels
(currently provided in Table 11 of the Position Limits Proposal based
on counts from the period of January 1, 2011, to December 31, 2012
period) in a new table, Table
[[Page 10023]]
11a, based on counts from the period of January 1, 2013, to December
31, 2014. To provide commenters with a sufficient period of time to
respond to questions raised and points made at the Energy and
Environmental Markets Committee meeting, as well as to provide an
opportunity to comment on Table 11a, the Commission will reopen the
comment periods for an additional 30 days. The Commission is providing
notice that 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 energy commodities. Furthermore, comments may be made
on Table 11a, showing counts of the unique persons over percentages of
the 28 proposed position limit levels based on counts from the period
of January 1, 2013, to December 31, 2014.
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 February
26, 2015, and will close on March 28, 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\
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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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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.
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\8\ See id. at 68947.
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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 end date as
the comment period for the Position Limits Proposal.\9\
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\9\ See 79 FR 2394 (Jan. 14, 2014).
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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 (79 FR
30762), reopening
[[Page 10024]]
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 a document in the Federal Register on July 3, 2014
(79 FR 37973), further extending the comment periods to August 4, 2014.
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 was 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\
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\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). The Commission also
provided 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
could be made on the issues addressed at the meeting or in
associated materials posted to the Commission's Web site, as they
pertained 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 pertained to agricultural commodities. See also 80
FR 200 (Jan. 5, 2015).
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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. Reopening of Comment Period
The Commission's Energy and Environmental Markets Advisory
Committee has scheduled a meeting on February 26, 2015. The agenda
adopted for the meeting includes consideration of exemptions for bona
fide hedging positions. In conjunction with the meeting of the
Commission's Energy and Environmental Markets Advisory Committee, the
Commission will post associated materials on the Commission's Web site;
additionally, access to a video webcast of the meeting will be added to
the Web site. To provide interested persons with a sufficient period of
time to respond to questions raised and points made at the Energy and
Environmental Markets Advisory Committee meeting, the Commission is
reopening both the Position Limit Proposal and the Aggregation Proposal
for an additional 30-day comment period. The Commission is providing
notice that, in addition to commenting on the agenda issues, 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
energy commodities, including hedges of a physical commodity by a
commercial enterprise, as pertains to energy commodities.
In addition, and in connection with the Energy and Environmental
Markets Advisory Committee meeting, the Commission is providing counts
of the unique persons exceeding the 28 proposed position limit levels
(currently provided in Table 11 of the Positions Limits Proposal based
on counts from the period of January 1, 2011, to December 31, 2012
period \12\) by certain specified percentages in a new table, Table
11a, based on counts from the period of January 1, 2013, to December
31, 2014. As was the case with Table 11, to provide the public with
additional information regarding the number of large position holders
in the past two calendar years, Table 11a provides counts of unique
persons over 60, 80, 100, and 500 percent of the levels of the position
limits proposed for 28 core referenced futures products.\13\ Note that
the 500 percent line is omitted from Table 11a for contracts where no
person held a position over that level. The Commission notes that in
addition to commenting on the agenda issues and on the issues addressed
at the meeting or in associated materials posted to the Commission's
Web site, as they pertain to energy commodities, comments may be made
on Table 11a.
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\12\ See 78 FR 75680 at 75731 (Dec. 12, 2013).
\13\ As is the case for Table 11, the Commission notes that
Table 11a is presented using the proposed initial limit levels,
without regard to alternatives presented in the proposed rule. See
78 FR at 75839 for the proposed initial limit levels for the spot
month. The Commission also proposed alternatives methods for setting
initial levels for the spot month. See FR at 75727-8. The proposed
initial limit levels for the non-spot months are found at 78 FR
76787 (Dec. 19, 2013). The Commission also proposed an alternative
method to establish higher initial limit levels in the non-spot
months. See FR 78 at 75734.
Table 11a--Unique Persons Over Percentages of Proposed Position Limit Levels, January 1, 2013, to December 31,
2014
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Unique persons over level
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Commodity type/core referenced Percent of Spot month
futures contract level (physical- Spot month Single month All months
delivery) (cash-settled)
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Legacy Agricultural
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CBOT Corn (C)................... 60 206 -- 12 25
80 147 -- 4 7
100 49 -- (*) 5
500 4 -- -- --
CBOT Oats (O)................... 60 (*) -- 11 12
80 (*) -- 6 8
100 -- -- (*) 5
CBOT Soybeans (S)............... 60 127 -- 14 18
80 90 -- 9 11
100 31 -- 6 9
500 9 -- -- --
CBOT Soybean Meal (SM).......... 60 53 -- 42 54
80 31 -- 12 19
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100 16 -- 6 11
500 (*) -- -- --
CBOT Soybean Oil (SO)........... 60 82 -- 31 38
80 51 -- 10 18
100 18 -- 5 11
500 (*) -- -- --
CBOT Wheat (W).................. 60 39 -- 35 33
80 30 -- 12 17
100 10 -- 8 11
500 (*) -- -- --
ICE Cotton No. 2 (CT)........... 60 16 -- 15 22
80 10 -- 10 14
100 7 -- 8 10
500 4 -- -- --
KCBT Hard Winter Wheat (KW)..... 60 17 -- 32 39
80 7 -- 16 27
100 (*) -- 12 12
MGEX Hard Red Spring Wheat (MWE) 60 7 -- 33 36
80 4 -- 20 29
100 (*) -- 15 21
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Other Agricultural
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CBOT Rough Rice (RR)............ 60 9 -- 6 5
80 7 -- 4 4
100 (*) -- (*) (*)
CME Milk Class III (DA)......... 60 NA 5 (*) 26
80 NA 4 -- 15
100 NA (*) -- 10
CME Feeder Cattle (FC).......... 60 NA 113 8 14
80 NA 70 (*) 8
100 NA 28 -- 5
CME Lean Hog (LH)............... 60 NA 98 19 34
80 NA 74 8 24
100 NA 45 (*) 14
CME Live Cattle (LC)............ 60 51 -- 14 29
80 7 -- 7 16
100 5 -- (*) 8
ICUS Cocoa (CC)................. 60 4 -- 47 42
80 4 -- 38 30
100 (*) -- 21 21
ICE Coffee C (KC)............... 60 14 -- 30 32
80 10 -- 13 16
100 6 -- 8 11
500 (*) -- -- --
ICE FCOJ-A (OJ)................. 60 5 -- 7 7
80 5 -- 4 4
100 5 -- 4 4
ICE Sugar No. 11 (SB)........... 60 55 -- 41 39
80 42 -- 31 29
100 16 -- 21 22
500 (*) -- -- --
ICE Sugar No. 16 (SF)........... 60 5 -- 6 13
80 5 -- 6 11
100 4 -- 5 11
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Energy
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NYMEX Henry Hub Natural Gas (NG) 60 187 236 (*) 7
80 142 205 (*) (*)
100 83 187 -- (*)
500 (*) 46 -- --
NYMEX Light Sweet Crude Oil (CL) 60 135 100 (*) 12
80 95 87 (*) 7
100 44 65 -- (*)
500 -- -- -- --
NYMEX NY Harbor ULSD (HO)....... 60 76 68 13 16
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80 49 63 7 9
100 31 44 (*) 6
500 -- 5 -- --
NYMEX RBOB Gasoline (RB)........ 60 97 57 26 30
80 67 52 15 17
100 36 37 11 12
500 -- (*) -- --
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Metals
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COMEX Copper (HG)............... 60 12 -- 61 62
80 9 -- 37 40
100 4 -- 29 30
COMEX Gold (GC)................. 60 13 -- 22 24
80 9 -- 14 14
100 5 -- 10 11
COMEX Silver (SI)............... 60 9 -- 34 32
80 4 -- 20 21
100 (*) -- 16 16
NYMEX Palladium (PA)............ 60 9 -- 12 13
80 5 -- 9 5
100 (*) -- 4 4
NYMEX Platinum (PL)............. 60 11 -- 29 29
80 7 -- 18 18
100 (*) -- 9 9
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Legend:
* means fewer than 4 unique owners exceeded the level.
-- means no unique owner exceeded the level.
NA means not applicable.\14\
Both comment periods will reopen on February 26, 2015, and will
close on March 28, 2015.
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\14\ Table notes: (1) Aggregation exemptions were not used in
computing the counts of unique persons; (2) the position data was
for futures, futures options and swaps that are significant price
discovery contracts (SPDCs).
Issued in Washington, DC, on February 19, 2015, 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. 2015-03834 Filed 2-24-15; 8:45 am]
BILLING CODE 6351-01-P
Last Updated: February 25, 2015