Release: #4035-97
For Release: July 23, 1997

Commissioner Dial and CFTC Staff to Participate in Public Forum on Agricultural Trade Options at National Cattlemen's Beef Association Mid-Year Meeting in Reno

Commissioner Joseph B. Dial of the Commodity Futures Trading Commission (Commission) will participate in an open public forum on agricultural trade options, from 1:30 to 3:00 pm on Thursday, July 31, 1997, in the Bonanza C Room of the John Ascuaga Nugget Hotel, Reno, Nevada. The forum, hosted by the National Cattlemen's Beef Association (NCBA), is being held in conjunction with the NCBA mid-year meeting. The forum is open to the public, and any interested party is welcome to attend and participate.

The agricultural trade options to be discussed are off-exchange or over-the-counter options on certain domestic agricultural commodities, including grains, oilseeds, livestock and cotton. If the current regulatory ban on these options were to be lifted, the options could be offered and sold to producers, processors, commercial users, or merchants handling the underlying commodity for business-related purposes. The offer or sale of agricultural trade options has been banned since 1936 because of problems in the past with fraud and manipulation.

In May of this year, the Commission's Division of Economic Analysis issued a "White Paper" entitled, "Policy Alternatives Relating to Agricultural Trade Options and Other Agricultural Risk-Shifting Contracts." Pursuant to the White Paper's recommendation, in June the Commission issued an Advance Notice of Proposed Rulemaking seeking comment on whether it should propose rules to lift the ban on agricultural trade options and, if so, subject to what conditions.

Commissioner Dial will be accompanied by a staff member from the Division of Economic Analysis, who will explain the White Paper and the Advance Notice of Proposed Rulemaking. Following this presentation, the Commissioner will open the floor for questions and comments by the audience. A transcript of the open forum will be included in the public comment file on the Advance Notice of Proposed Rulemaking.