2010-20428
FR Doc 2010-20428[Federal Register: August 18, 2010 (Volume 75, Number 159)]
[Proposed Rules]
[Page 50950]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18au10-37]
[[Page 50950]]
=======================================================================
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
17 CFR Parts 1, 20, and 151
RIN 3038-AC85
Federal Speculative Position Limits for Referenced Energy
Contracts and Associated Regulations
AGENCY: Commodity Futures Trading Commission.
ACTION: Proposed rules; withdrawal.
-----------------------------------------------------------------------
SUMMARY: On January 26, 2010, the Commodity Futures Trading Commission
(``CFTC'' or ``Commission'') proposed to implement position limits for
futures and option contracts based on a limited set of exempt
commodities,\1\ namely certain energy commodities (``Federal
Speculative Position Limits for Referenced Energy Contracts and
Associated Regulations,'' for ease of reference, herein referred to as
the ``Energy Proposal'').\2\ In accord with the significant amendments
introduced to the Commodity Exchange Act of 1936 (``Act'' or ``CEA'')
by the recent enactment of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (``Dodd-Frank Act''),\3\ the Commission is
withdrawing its Energy Proposal as it plans to issue a notice of
rulemaking proposing position limits for regulated exempt commodity
contracts, including energy commodity contracts, as directed by the
Act.
---------------------------------------------------------------------------
\1\ Section 1a(14) of the Commodity Exchange Act, 7 U.S.C.
1a(14). An exempt commodity is defined as a commodity that is
neither an excluded commodity, as that term is defined by CEA
Section 1a(13), nor an agricultural commodity. Generally the
definition encompasses energy commodities and metals.
\2\ 75 FR 4133 (January 26, 2010).
\3\ Public Law 111-203.
FOR FURTHER INFORMATION CONTACT: Bruce Fekrat, Special Counsel, Office
of the Director, Division of Market Oversight, Commodity Futures
Trading Commission, Three Lafayette Centre, 1155 21st Street, NW.,
Washington, DC 20581, telephone (202) 418-5578, facsimile number (202)
---------------------------------------------------------------------------
418-5527, e-mail [email protected].
SUPPLEMENTARY INFORMATION: On January 26, 2010, the Commission issued
the Energy Proposal to establish CFTC-set position limits for four
enumerated contracts--the New York Mercantile (``NYMEX'') Henry Hub
natural gas contract, the NYMEX Light Sweet crude oil contract, the
NYMEX New York Harbor No. 2 heating oil contract, and the NYMEX New
York Harbor gasoline blendstock (RBOB) contract--as well as for, with
limited exceptions, any other contract that was exclusively or
partially based on the above referenced contracts' commodities and
delivery points. The Energy Proposal included, inter alia, provisions
relating to exemptions for bona fide hedging transactions and certain
swap dealer positions maintained to manage the risk of an unbalanced
swaps book.
At that time, section 4a(a) of the Act authorized the Commission to
establish position limits for contracts traded on or subject to the
rules of a designated contract market or significant price discovery
contracts traded on exempt commercial markets. The purpose of such
limits, as stated in prior section 4a(a), was to eliminate or prevent
excessive speculation causing sudden or unreasonable fluctuations or
unwarranted changes in the price of a commodity. Section 4a(a) of the
CEA, as amended by the Dodd-Frank Act, directs the Commission to set
position limits for all regulated exempt and agricultural commodity
derivatives. More specifically, amended section 4a(a)(2)(B) of the Act
requires the Commission to establish limits for exempt and agricultural
commodity derivatives within 180 and 270 days, respectively, of the
Dodd-Frank Act's enactment date. In addition, amended section 4a(a) of
the Act explicitly requires the implementation of aggregate position
limits across certain derivatives positions established on designated
contract markets, swap execution facilities, or foreign boards of
trade, or through bilateral trading. Thus, the CFTC intends to publish
a notice of rulemaking proposing Commission-set position limits and
exemptions therefrom for such derivatives pursuant to section 4a(a) and
other related provisions of the CEA, as amended by the Dodd-Frank Act.
In doing so, the Commission intends to take account of the Energy
Proposal and build on the substantive issues raised by the commenters
thereon.
In light of the broadened scope and new requirements of the CEA, as
amended by the Dodd-Frank Act, and amended section 4a(a) of the Act in
particular, the Commission has determined to withdraw the pending
Energy Proposal as it plans to issue a notice of rulemaking proposing
position limits and exemptions therefrom for regulated exempt commodity
derivatives, including energy derivatives, as directed by the Dodd-
Frank Act.
Issued by the Commission this August 12, 2010, in Washington,
DC.
David Stawick,
Secretary of the Commission.
[FR Doc. 2010-20428 Filed 8-17-10; 8:45 am]
BILLING CODE 6351-01-P