[Federal Register: October 6, 2000 (Volume 65, Number 195)]
[Notices]
[Page 59825-59826]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06oc00-61]

=======================================================================
-----------------------------------------------------------------------

COMMODITY FUTURES TRADING COMMISSION


New York Board of Trade; Proposed Amendments to the Coffee ``C''
Futures Contract

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of availability of proposed amendments to contract terms
and conditions.

-----------------------------------------------------------------------

SUMMARY: The New York Board of Trade (Exchange) has proposed amendments
to the Exchange's coffee ``C'' futures contract. The proposed
amendments would specify the conditions under which deliverers,
receivers and operators of regular warehouses are liable for the repair
of torn coffee bags, require that Exchange-licensed warehouses maintain
a log of the required weekly inspections of futures delivery coffee,
and establish an expedited arbitration procedure to be used in the case
of controversies concerning liability for torn bags. The proposed
amendments were submitted under the Commission's 45-day Fast Track
procedures which provide that, absent any contrary action by the
Commission, the proposed amendments may be deemed approved on October
30, 2000--45 days after the Commission's receipt of the proposals. The
Acting Director of the Division of Economic Analysis (Division) of the
Commission, acting pursuant to the authority delegated by Commission
Regulation 140.96, has determined that publication of the proposed
amendments is in the public interest and will assist the Commission in
considering the views of interested persons.

DATES: Comments must be received on or before October 23, 2000.

ADDRESSES: Interested persons should submit their views and comments to
Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three
Lafayette Centre, 21st Street, NW, Washington, DC 20581. In addition,
comments may be sent by facsimile transmission to facsimile number
(202) 418-5521, or by electronic mail to secretary @cftc.gov. Reference
should be made to the proposed amendments to the New York Board of
Trade coffee ``C'' futures contract regarding torn coffee bags.

FOR FURTHER INFORMATION, CONTACT: Please contact John Bird of the
Division of Economic Analysis, Commodity Futures Trading Commission,
Three Lafayette Centre, 21st Street NW, Washington, DC 20581, telephone
(202) 418-5274. Facsimile number: (202) 418-5527. Electronic mail:
[email protected]

SUPPLEMENTARY INFORMATION: The coffee `C' futures contract currently
calls for the delivery of specified growths of washed arabica coffee
packaged in bags and held in storage at Exchange-licensed warehouses
located in New York, New Orleans and Miami. The duties and obligations
of licensed warehouse operators are specified in Coffee `C' Resolution
No. 2 Under Part (IV)(2) of Resolution No. 2, Exchange-licensed
warehouse operators are required to maintain coffee bags in store in
accordance with Exchange standards, including keeping the stored coffee
bags and coffee clean, undamaged, and free from any and all foreign
matter which could be detrimental to the delivery of the coffee.
Licensed warehouse operators also are required to conduct weekly
inspections of each lot of Exchange coffee in store to determine the
condition and conformity with Exchange standards.
    Part (IV)(3) of Resolution No. 2 currently requires that licensed
warehouse operators are required to promptly repair any coffee bags
that are torn, bags from which coffee beans are sifting, or bags that
are in peril of having coffee beans spilled therefrom. Part (IV)(4)
further provides that, with the exception of coffee bags that exhibit
the aforementioned conditions, the licensed warehouse operator must
notify the owner of the coffee of any further maintenance to be
performed on the bags and provide the owner five business days to
respond. If no response is received within five business days, the
owner is deemed to have authorized the maintenance and to have agreed
to pay all costs associated with said maintenance. The resolution also
currently specifies that the licensed warehouse operator may notify the
Exchange if the warehouse operator believes that the response received
from the owners is insufficient to bring the coffee bags into
compliance with Exchange standards.
    The proposed amendments would implement new provisions clarifying
the responsibilities of deliverers, receivers and licensed warehouse
operators with regard to the repair of torn bags. The proposed
amendments would provide, in part, that, if the licensed warehouse
operator has given written notice to the deliverer prior to delivery
that one or more of the bags containing the delivery coffee are torn,
the deliverer of the coffee is responsible for the repair of the torn
bag(s). Alternatively, if the warehouse has met its obligations as
provided in Coffee ``C'' Resolution No. 2(IV)(2) and the receiver has
failed to inspect the coffee during the seven business days between the
issuance of the delivery notice and the delivery date, the receiver is
responsible for repair of the bag(s). The proposed amendments will
further specify that, in order for the warehouse to demonstrate that it
is conducting the weekly inspections of the coffee as required in

[[Page 59826]]

Coffee ``C'' Resolution No. 2(IV)(2), the warehouse will be required to
keep a log of the weekly inspections. The log will be required to
contain specific information including the location of the warehouse,
the name of the individual who conducted the inspection, and the
Exchange application and lot numbers of the bags found to require
maintenance work.
    The proposed amendments also would provide, in part, that a dispute
between any member and a licensed warehouse operator concerning the
liability for a torn bag during the delivery period may be settled by
arbitration before a Special Arbitration Committee consisting of three
disinterested members of the Exchange's Warehouse and License
Committee, who must be appointed by the Committee's Chairman within one
business day after the Exchange's receipt of a written notice of the
dispute. If members of the Warehouse and License Committee have an
interest in the dispute, the Chairman may appoint other persons who are
associated with coffee warehousing and storage. However, at least one
member of the Special Arbitration Committee must be a member of the
Exchange's Warehouse and License Committee. The proposed amendments
also would change the fee a claimant must pay for filing a notice of
dispute with the Exchange to $375 for each lot of coffee covered by a
notice of dispute, in place of the current requirement that a single
fee of $375 per notice by paid.
    The Exchange intends to make the proposed amendments effective upon
Commission approval for all existing and newly listed contract months.
    According to the Exchange, the proposed amendments concerning the
liability for repair of torn coffee bags essentially will provide that,
as long as the warehouse is doing its job as required by Resolution No.
2, then either the delivery or the receiver is responsible for repair
of the bags.
    The Division is requesting comments on the proposed amendments.
    Copies of the proposed amendments will be available for inspection
at the Office of the Secretariat, Commodity Futures Trading Commission,
Three Lafayette Centre, 21st Street NW, Washington, DC 20581. Copies of
the proposed amendments can be obtained through the Office of the
Secretariat by mail at the above address, by phone at (202) 418-5100,
or via the Internet at [email protected].
    Other materials submitted by the Exchange in support of the
proposal may be available upon request pursuant to the Freedom of
Information Act (5 U.S.C. 552) and the Commission's regulations
thereunder (17 CFR part 145 (1987)), except to the extent they are
entitled to confidential treatment as set forth in 17 CFR 145.5 and
145.9. Requests for copies of such materials should be made to the FOI,
Privacy and Sunshine Act Compliance Staff of the Office of Secretariat
at the Commission's headquarters in accordance with 17 CFR 145.7 and
145.8.
    Any person interested in submitting written data, views, or
arguments on the proposed amendments, or with respect to other
materials submitted by the Exchange, should send such comments to Jean
A. Webb, Secretary, Commodity Futures Trading Commission, Three
Lafayette Centre, 21st Street NW, Washington, DC 20581 by the specified
date.

    Issued in Washington, DC, on October 3,2000.
Richard Shilts,
Acting Director.
[FR Doc. 00-25924 Filed 10-5-00; 8:45 am]
BILLING CODE 6351-01-M

======== RETURN TO INDEX ========